WEB So I'm starting an S-Corp v. Need Advice

Discussion in 'OT Technology' started by Ender0910, Sep 1, 2008.

  1. Ender0910

    Ender0910 woot!

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    A while back, when I was looking into LLCs, I learned that S-Corps are a pretty good option. A couple weeks ago, I saw that some of you on this forum think that's a good idea as well, so I decided that was the way to go. Now that my business partner and I are making some decent money I want to get this stuff squared away asap.

    My state (WA) has decent fees and online registration so I'll probably just do it here.

    For those of you with S-Corporations, did you register the corporation yourself? If you got help, where? How many shares did you say your company will have? From what I see, I just need to 1. register a corporation 2. file the correct form with the IRS declaring S-status, is that correct?

    Any advice in general?
     
  2. Tony Stark

    Tony Stark John McCain has an illegitimate mexican baby

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    what are your finances like? i.e. what are your revenues, what are your expenses(i.e. salary - $X) etc
     
  3. Ender0910

    Ender0910 woot!

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    revenue: $2-3k/mo

    expenses: not much actually
    hosting - $150
    ads/etc. - $350 (ballpark)

    Then it's just the two of us (a designer and a coder) working together. I'm not sure what kind of salary we would pay ourselves. With the amount we make right now, it looks like minimum wage for the both of us would finish off our income nicely :p


    So how does this impact the S-Corp registration? Perhaps too little money to bother and should just go with an LLC?
     
  4. 197666

    197666 New Member

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    Ifl.
     
  5. thomor25

    thomor25 I make money online....

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    find a good accountant, use his as your account, have him/her draw up the papers nad file for you and have them do the record keeping and bookkeeping for the company that way if you get a letter that says you didn't pay state this or that it falls on them cause they didn't do it.

    My accountant takes care of everything, all I do is sign papers and a check to him each month. He takes care of the corp, all taxes, all minutes, everything.
     
  6. Tony Stark

    Tony Stark John McCain has an illegitimate mexican baby

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    how much do you pay your accountant per month? I'm getting a little bit overwhelmed with paperwork. Do you just send them an email saying: "Hey Joe, this month our revenues were $38,000, our expenses were $6,000 for servers, $4,000 for marketing and $1500 for office space"
     
  7. thomor25

    thomor25 I make money online....

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    basically yah but I keep track with quicken and when it comes time to file estimated quarterly i just give him the print out, I pay him like I dunno I haven't payed him in like 4 or 5 months and my bill is like 300 dollars
     
  8. Ender0910

    Ender0910 woot!

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    Oh that isn't too bad. I was afraid it would be super expensive to get an accountant.

    That sounds like a great idea, getting some help. How does one go about finding an accountant? Should I just be hitting the yellow pages/internets or are there some larger chains that will work?
     
  9. crazybenf

    crazybenf Active Member

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    I register all of my own corps online. It takes about 5 minutes and is cheap (~$100)

    The S corp status is given by the IRS.. you have to fill out another form after you get your EIN (form 2553) The EIN takes about 5 min to get over the phone.


    The #1 key to being successful with an S Corp is a good accountant. Find out how much you can have the company pay for, what to pay yourself (monthly distributions or salary?), etc. You DONT want to go overboard on the company cards and get audited.

    I meet with my accountant and tax lawyer quarterly. The accountant is $500/meeting and the tax lawyer is $1500/hour. I split the rates for the tax lawyer with 3 colleagues of mine, as we usually have the same questions/situations.
     
  10. crazybenf

    crazybenf Active Member

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    The whole point of an Scorp is to hide money from taxes. You want the company to pay for EVERYTHING it can out of its funds-- food, 'office supplies', computers, electronics, etc. THEN you take a moderate salary or dsitribution that is taxed... But if the company is already renting a room from you @ 1/3 your rent/power/gas/water/car/etc.. you're way ahead.
     
  11. drumbandit

    drumbandit New Member

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    $1500/hour for a tax attorney? Sounds like you're getting swindled.
     
  12. crazybenf

    crazybenf Active Member

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    for the $1500 it costs me for the meeting (4 hours, 4 people), it has saved me WAY more in the long run.
     
  13. JordanClarkson

    JordanClarkson OT Supporter

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    I'm looking to form an S-corp with a partner. We were going to receive whatever the company's net profits as salary. So should we give ourselves a fixed salary based on expected earnings instead? And then the company will get a net profit that is split among shareholders, or carry debt? I can only claim services/material that's used in production/business right?
     
  14. widds2v

    widds2v Active Member

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    so you make between $1000-2000 a month and want to start up a corp? I don't see the point. Maybe when you guys are pulling in $15,000+ a month but right now you're barely making any money.
     
  15. SLED

    SLED build an idiot proof device and someone else will

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    liability
     
  16. Tony Stark

    Tony Stark John McCain has an illegitimate mexican baby

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    then why not go for LLC first and then switch?
     
  17. crazybenf

    crazybenf Active Member

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    taxed on all income vs taxed on only salary.
     
  18. Tony Stark

    Tony Stark John McCain has an illegitimate mexican baby

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    as an LLC you can still write off your expenses. And then when you are finally profitable, thats when you can switch.
     
  19. SLED

    SLED build an idiot proof device and someone else will

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    why bother with the switching?
     
  20. Tony Stark

    Tony Stark John McCain has an illegitimate mexican baby

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    Inc has a few more obligations to the gov't that you have to do.
     
  21. SLED

    SLED build an idiot proof device and someone else will

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    much less of a pain than trying to re-open your business later under a different entity
     
  22. biawokauns

    biawokauns New Member

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    it's more about liability
     
  23. biawokauns

    biawokauns New Member

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    btw, we just set up another company in WA...legalzoom was pretty quick and inexpensive
     

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