Should I incorporate

You have employees, right? If so, you need to be a corp of some sort (at least in RI). I am an S-corp on my accountant's advice. I can take profit distributions without paying capital gains, unemployment or social security on them. Not like it's happened much, but it is a good way to avoid capital gains.

-Tom
 
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You have employees, right? If so, you need to be a corp of some sort (at least in RI). I am an S-corp on my accountant's advice. I can take profit distributions without paying capital gains, unemployment or social security on them. Not like it's happened much, but it is a good way to avoid capital gains.

-Tom

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We are an LLC. Has it's advantages and disadvantages.

Paying capital gains? What do you mean by this exactly? I think I know what you are talking about.

(in)Corporate any way that makes sense to you. Separate business from yourself. If something terrible happens you don't loose "everything."
 
Talk to a good small biz accountant, preferably somebody who has other service biz clients. We're an S-corp but LLC is there for good reason. It all goes back to disbursement of funds (and how they are taxed) if I remember correctly. Typically one owner situations with a year round payroll are better as S-corps.
 
Correct, Reed.

Casey, capital gains basically is tax on anything you didn't reinvest or spend toward the business, i.e., profit. That's why the S-corp profit distribution option is good, if I get to the end of the year and have X in the bank, I can basically take it out relatively tax free rather than losing 30+ percent of it to Uncle Sam. The problem is, with my monthly expenses, I absolutely have to keep a decent sized sum of money in there anyway. They say the calendar year reconciles itself, but I'm a now kind of guy LOL.

-Tom
 
The S corp gives you more options at Tax time and, when ran correctly, will protect your personal assets. I would not do it if you do not plan to utilize an excellent tax advisor/accountant to make sure you are following the rules. It is not very expensive and you sleep much better at night.
 
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Tom- you have to take a reasonable salary first. The government never lets you get away scott free.

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Correct, the profit distribution cannot exceed year end company profit nor personal salary. But it's a good tool for those of us that are trying to be reasonable. :)

-Tom
 
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Casey, capital gains basically is tax on anything you didn't reinvest or spend toward the business, i.e., profit. That's why the S-corp profit distribution option is good, if I get to the end of the year and have X in the bank, I can basically take it out relatively tax free rather than losing 30+ percent of it to Uncle Sam. The problem is, with my monthly expenses, I absolutely have to keep a decent sized sum of money in there anyway. They say the calendar year reconciles itself, but I'm a now kind of guy LOL.

-Tom

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Thanks Tom,
Our diesel tech went from an LLC to S-corp here recently.
 
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