Making Your Business Incorporated or not

wesmo's picture

Hey Folks

It's getting to be rounding the corner to tax season (almost) and every year I am thinking if its time I going "incorprated" or some such, instead of having clients sign me a check in my name, I'd become a company. It'd be for side freelance work, as I dont do all that much freelance, somewhere around $4-5000 a year.

I am wondering how some of you that have done that like it, as opposed to not being incorporated, and what in your view are the pros and cons to think about? Lastly, if I were to do this, I know you can do it through a government or state website or local gov office, but was wondering if there was a place online that handles it specifically for designers needs?

thanks for any info!

jupiterboy's picture

Well, liability is an issue, so you can sleep and not worry about some slip 'n' fall act if you have clients on site.

If you are incorporated, you will have to take minutes, so that's a bit more paperwork. And, you CPA will probably want you to pay yourself a regular amount on a regular basis.

You can do the papers on line, but I can't vouch for it.

At your billing, I honestly wouldn't sweat it. Get a DBA and open a business checking if you wan't to be more legit.

George Thomas's picture

That's an issue that should be discussed with an attorney and/or a CPA. There are issues involved that you won't think of and there are corporate variations that might better suit your situation than you are aware of.

michaelbrowers's picture

Agreed. This is an issue best discussed with the appropriate professionals to give you sound, and properly informed, advice based on your situation and needs.

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Michael Browers
www.michaelbrowers.com

FeeltheKern's picture

If you're making $4-5K a year, then incorporating will probably not make that much sense for you, unless you expect that amount to spike dramatically in the near future. Of course it is true that you could be sued as an independent contractor, but the fees you have to pay to incorporate, the amount of paperwork you need to do, and the time involved would not be worth it in my book. You probably still need a business license from both your city and state, if you haven't done that already, even if you're just a sole proprietor -- I don't remember what the cutoff is, but when you make over a certain amount you need to legally get a business license.

wesmo's picture

Hi all, and thanks for your input. Sounds like I my billing its not worth it, eh? In the meantime I did do some checking online and from other sources, and it lead me to this place:
http://www.legalzoom.com/

They seem legit and relatively cheap. It sounds like maybe a LLC might be the best fit for my situation if anything? Here is a comparison of the two options
Link

still thinking on it. I am going to talk to my tax guy what kind of saving I may or may not get from LLC.

thanks again for the pointers

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