small business owners

[jimmyinkedup]

can you save money on taxes though by doing it as an llc? I didnt know if i mad in office in my place if things like part of my rent could be deductible.

Now I'm no expert on this but my mother has worked for a cpa for the last 25 years. She was advsing my cousin who is a contractor on this very question a few years ago., I recall her telling him it isnt like it used to be - a home office deduction requires a lot more to substantiate nd justify than it used to. Not saying you cant by any means - justr saying hopefully an accountant here can chime in and tell you the requirements to do what you asked here -its not as easy as just incorporating....

[JohnnyVegas]

I recall her telling him it isnt like it used to be - a home office deduction requires a lot more to substantiate nd justify than it used to. Not saying you cant by any means - justr saying hopefully an accountant here can chime in and tell you the requirements to do what you asked here -its not as easy as just incorporating....

Agree with above. Home offices are tough now. My wife's mother was audited and they hammered her on her home office...and she is a CPA that only takes a modest home office deduction.

You probably won't save any money on taxes as you will probably start a business entity that has passthrough income. It might allow you to deduct some expenses more easily inside the business entity though. Such as the entity paying rent, rather than taking personal deductions for a home office. But, in order to do this right, you will need to incorporate AND comply with several city, county, state and federal government departments. Fed and state unemployment, state sales tax, state or county business license, state business license, etc. And you are supposed to get liability insurance on your office. Not sure if homeowners will cover it if you are running a business in a place that isn't zoned for it. You will also need many of the above things to open a business checking account. Co-mingling business and personal funds is a huge red flag, so you will need to keep them separate.

Government compliance is a huge pain in the *ss, so I would talk to a CPA and not take ANYONE'S advice (including mine) on this other than a professional. It sucks when you get audited and your only defense is "my friend said this was good enough".

Also watch out for companies that pay their employees as contractors. Unless they are a huge company that has been around for a long time, they might be doing it to avoid paying the matching funds...and the government hammers them when they catch on. The taxes, penalty and interest puts the company out of business. It happens all the time. Plus, if the company doesn't pay the matching funds you can actually pay MORE in taxes because you need to pay an additional self employment tax which basically makes up for the employer not paying the matching funds that come out of your check.

Did I already say talk to a CPA? :-)