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I don’t know what the benefit would be. Isn’t registering as a business just a tax to your local government?
I thought the main reason is that if you registered as an LLC then you would not be held responisible if some person wanted to sue you because they lost all their money. The other reason is part to pay taxes so if they ever do legalize it I am all setup and ready.
I am sure most people dont worry about any of that and just go on as themselves without registering as a business but I want to know from the people that have registered as a business how they did it. Do you just do Schedule9 or are you an LLC or something else?
It is definitely better to be on the legal side – which means you need t be registered.
As what depends totally on you, just one site with a small income will be fine as sole proprietorship.
Once you make more money, consult a professional.
If you’re making money then you should expect to pay taxes. If you’re not – then you are breaking the law – and TAX law is one aspect that governments seem to leave no stone unturned.
If I correctly recall my recent American social history – it is usually undeclared taxable income that gets the big businesses, and crooks thrown in the slammer …
sigh.gifI’m registered and our primary business is the nice and generic “internet consultancy”. I declare all my work, earnings and include my affiliate marketing income in the mix.
You should be registered as a business (or sole trader) and actively working with a tax consultant to minimise tax costs. Currently my newly acquired holiday beach house (up the coast) is the company office and all mortgage interest is a straight up deductible expense.
:la-de-da:Tax is sometimes considered a pain – but you only pay taxes when you are making a profit – and as responsible citizens is is our duty to help to fund a lot of the social programs that are sorely needed in our community.
Be up front – pay your taxes – THEN YOU HAVE EVERY RIGHT TO COMPLAIN ABOUT THE GOVERNMENT.
:angel:I have no problem paying the taxes, thats the reason I’ve been keeping track of everything so that isn’t the issue. The issue is how did you register the business if you have done so and what way did you register it.
If I continue as I am now, I do plan on claiming everything on my year end taxes unless I have the business and I’ll do it however that is done.
I want to make one thing clear, I pay a LOT of Federal Income tax, and CA State income tax. When I started making money I hired someone who is both a tax attorney, and CPA and asked if I should incorporate. Without going into a lot of boring tax talk his short answer was no. One of the benefits of incorporating is individual protection from being sued. He thought the chances of someone suing a website owner were very remote, and the corp would not protect me if say soemone broke their neck in my pool since that isn’t for my business.
Now when you ask about registering as a business, my understanding is that all this means is that you pay another “tax” to your city or country, and they give you a little certificate (much like the Wizard of Oz) that says you have a business. I don’t see any benefit or protection to having that piece of paper but maybe someone can point out my error. My place of business is not here in my home city or state, it is out on a server somewhere.
You should consult an accountant on this matter. I’m not an accountant, but got advice on this before ever starting. His advice was to run the company as a sole proprietorship or simple partnership, that way you avoid double-taxation by claiming the revenue on your personal income taxes. Otherwise, you could go the route of LLC or more likely S-Corp, which would provide you with personal protection against a lawsuit filed against your corporation. This means someone who thinks they are wronged can’t go after your house, car, boat, etc. they could only go after the businesses assets. So, incorporating won’t save your business from being at risk, just yourself. If you are a one-man company (we aren’t btw), then the sole proprietorship can work fine. Again, contact an accountant for the best advice.
Thank you for the advice you have all given so far. I do appreciate it very much.
I registered my site as an LLC this year only because I’m making enough money to make me VERY nervous about the tax thing. It really sucks to have to give Uncle Sam 33% of what I earn so that they can waste. It would be great to keep it all of the loot, but I’m NOT one to threaten my freedom for money.
I find that having a good CPA is the way to go. They will help you do everything to get set up as well as offer advice on how to save money. They do all of the filing of the many forms that are required for a corporation. The only thing I have to adjust to is saving every single receipt and tracking mileage. LOL
Me and my new hubby are seriously thinking of finding a country that is more gambling friendly. :la-de-da: The USA is great, but I’ve worked for almost five years and I can’t have my livelyhood threatened or worry about being censored, shut down or any other wild thing our wondeful govenment may sling our way.
BJF wrote:I want to make one thing clear, I pay a LOT of Federal Income tax, and CA State income tax. When I started making money I hired someone who is both a tax attorney, and CPA and asked if I should incorporate. Without going into a lot of boring tax talk his short answer was no. One of the benefits of incorporating is individual protection from being sued. He thought the chances of someone suing a website owner were very remote, and the corp would not protect me if say soemone broke their neck in my pool since that isn’t for my business.Now when you ask about registering as a business, my understanding is that all this means is that you pay another “tax” to your city or country, and they give you a little certificate (much like the Wizard of Oz) that says you have a business. I don’t see any benefit or protection to having that piece of paper but maybe someone can point out my error. My place of business is not here in my home city or state, it is out on a server somewhere.
Agreed – it is different strokes for different folks (and different countries).
:colgate:Here in New Zealand the cost of incorporation is only about $150, and the corporate tax rate is a flat 33% which is significantly lower than the top personal tax rate.
There are certainly no additional corporate taxes, and while the site remains a mom ‘n pop operation (me and my partner) there are no additional compliance costs. It’s also nice to be a “Company Director” too.
:colgate:Over here – incorporation is a “no-brainer” …
:hattip:33% tax is actually very little compared to most European countries or even to Canada.
Antoine, if NZ is similar to Australia then whilst the corporate tax is low, the personal tax rates are nearly the highest in the world. Every dollar over $63K sees 42 cents go to the government and every dollar over $95K sees 47 cents go to the government. Plus the medicare levy and you get to keep even less. Incorporating usually results in a benefit but sometimes it’s only a timing thing as eventually the income ends up being shown at a personal level and tax is paid. Because of my other work, I look at it as in insurance policy because it removes the personal liability to a certain extent although there are still situations where directors a liable.
Paul, you forgot to add CEO and Founder as one of your titles. I’m that, a director, secretary and shareholder as well. Means stuff all really but what the heck, people don’t need to know it is a $2 company…
As for advice, consult an accountant. I’m an accountant (but not tax etc) and use a mate to do all my work. There’s no way I could or want to keep up to date with tax and corporate law.
S-Corp
Getting set up is not near as expensive as one would think. We’ve even got a gent running our payroll, which comes in handy if you have more than one person in your business. He cuts the checks, sends in all the taxes and what not, so we don’t have to worry about estimated income tax, etc.
We’ve found that the less time we’re forced to screw around with tax numbers, filings, who to pay, where to send it, etc., the more time we have to actually do our jobs… and we earn more in the long run.
Sounds like every developed country is the same when it comes to eating your money.
I also agree… it is very worthwhile to get an accountant. I personally give them a complete breakdown of profit and expenses so that they deduct every possible expense. Taxes are intentionally over complicated and this is to confuse us into not taking every possible deduction, an accountant knows how to go about doing this.
This is true.
However, it also good to pro-actively discuss tax minimisation practices too – legitimate ways to structure your spending and leasing arrangements in order to maximise tax breaks.
Talk to your account before, during and after the tax year in order to get the best return from his fees (which are also tax deductible).
Happy affiliating guys.
:cheers:
