- 14,809
I don't disagree - if you're going into a lease situation I'd also strongly recommend incorporating.
S Corp Vs. LLC ??
- Thread starter liquidblue33
- Start date
- 9,744
No doubt.
No, your last statement is untrue, here in Florida if you're a one man shop you can register yourself as the agency, you don't have to Inc. or LLC.
- Thread starter
- #24
Ok, so i can just register the fictitous name and i'm good to go? For now i will just be working out of my home, so a one man shop.
- 1,328
As John mentioned, being a sole prop in the beginning makes sense. Get your fictitious name and E&O and use your extra cash for leads, marketing, etc. If the business takes off... go see a CPA about incorporation.
- Thread starter
- #26
That is my plan exactly. I have the E&O and soon as i get some cash flow, i will be getting with a CPA. Thanks for all the advice, its greatly appreciated.
Marker77
Expert
When you start out, a sole prop. is fine as it doesn't really cost you anything except maybe a business license.
As you get up to about $80,000 in annual earnings it benefits you to set up an S corp or LLC from having to pay high FICA taxes and medicare tax. As mentioned already, you can set up yourself on a small salary like $25,000 and then pay make a K1 distribution from an S corp to avoid the FICA and medicare tax.
When you have an entity, you become a small fish in a big pond and your chance of audit is virtually eliminated as they don't have the time to audit a company with under $1 Million in revenues.
- 3,863
Very true, virtually all leases will require this and the leases are so one sided it is SICK. I refused virtually all leases because they were too long and one sided, complete garbage.
I signed one lease , lined out about half of it - to my surprise the building was so empty they took the lease. After that I had enough and bought a small office.
Get E&O before anything else. Most carriers require it any way.
You can start out as SP, but think about converting to LLC as soon as possible.
Check your local govt on whether you need a biz license or not and how they treat DBA's. Many states require you to register the DBA with the SOS. If you want commissions paid to your agency (strongly advised) check with the DOI on how to handle that.
Do NOT under any circumstances combine business assets, revenue, expenses with personal bank accounts. Set up a separate bank account in your name (if SP) or under the DBA. I would also suggest you dedicate one credit card to business only and keep very good records.
Set aside 20% (minimum) of every earned commission dollar in a separate account to cover income & SE tax (fed & state). Do not touch this money until filing quarterly taxes. Otherwise you can be in deep dodo.
You can start out as SP, but think about converting to LLC as soon as possible.
Check your local govt on whether you need a biz license or not and how they treat DBA's. Many states require you to register the DBA with the SOS. If you want commissions paid to your agency (strongly advised) check with the DOI on how to handle that.
Do NOT under any circumstances combine business assets, revenue, expenses with personal bank accounts. Set up a separate bank account in your name (if SP) or under the DBA. I would also suggest you dedicate one credit card to business only and keep very good records.
Set aside 20% (minimum) of every earned commission dollar in a separate account to cover income & SE tax (fed & state). Do not touch this money until filing quarterly taxes. Otherwise you can be in deep dodo.
Agent_Healer
New Member
- 7
In my view -- the reason for incorporation is both taxation AND to avoid personal liability. I'm offering health, life, & financial products. If someone wants to sue -- I'll bet they go after both E&O and would sue me personally to get at my personal assets. $1M isn't much when you look at healthcare 'situations'. Consult an attorney to see if an LLC or S-Corp can keep your assets safe.
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