RE: FLASH: OT: Business Question

[Teri Jones]

Russell

While I may be giving you too much information, I hope that this will help

you decide how to proceed with your new company.  Congratulations, by the

way!  It is not that hard if you set up your company correctly from the

beginning and that is the key.


I am not familiar with the laws of Illinois but you will need file your

corporation or limited liability company papers with the State.  In

Colorado, there are standard forms you can fill out and file at the

Secretary of State's office to start your business.  There is a filing fee

here.  I am a paralegal (plus I do accounting but do not specialize in

taxes) in Colorado and believe it is worth the money to spend time with an

attorney if you have any questions at all in regards to the legal standing

of your company.  Contrary to common believe, most attorneys are there to

work for you and make sure that you are legally sound.  Your state can give

you some information, but cannot give you legal advice and neither can I.


Corporations can be a Sub-S, meaning that the stockholder pays the taxes on

profit and not the corporation, or, a C corporation, meaning that the

corporation pays the taxes and then pays you a salary.  C corporations can

be considered double taxation, though, if it is just you as the corporation

pays a tax on the profit and then you pay a tax on your salary.  There can

be reasons to use a C corporation, however.  The newest legal animal is

limited liability companies (LLC's) and variations thereof.  These can be

setup like a partnership or Sub-S.  Again, your personal situation would

need to be reviewed by you or a tax accountant to determine which entity is

the best for you.  If you have a wife or significant other or partner that

you want included, a LLC may be the best way to go.  If you are just trying

to separate your business from your personal life, a Sub-S may be your best

answer.  If you feel confident that you know which company is best for you,

then you can always file the standard papers.  If you have special issues,

though, speak to a tax accountant and then an attorney to set up your

company.


You will need to obtain a Federal Employer Identification Number(FEIN)from

the IRS as well to make your company legal (fill out Form #11-SS4).  If you

select a Sub-S corporation, you must submit a 2553 Form within so many days,

which the IRS approves.  You can obtain IRS forms from their Internet site.

And Illinois may require that you file paperwork with them for state

withholdings, unemployment, workmen's compensation, etc., even if you are

the sole employee (especially a C corporation).


For this type of work, you could use Quicken 99 to track your accounting,

which does personal and/or business finances.  It does have some info

regarding deductions, etc., built into it.  In all fairness, I know

Microsoft has improved its Money 99 program and it may offer the same type

of thing.  Microsoft did allow a trial version of Money 99 to be downloaded

a few months ago if you want to try that.  I would not buy the Quicken 99

Suite, which has some legal and financial planning as it may not be suited

to what you are doing.  In my opinion, you are better off hiring a CPA who

is known in your area as a good tax consultant for tax questions or planning

as the IRS rules are always changing.  If they are familiar with your

situation and the type of work you do, you will get better advice from a CPA

than a software program.  I believe, though, that you could handle Quicken

or Money easily enough to give the tax accountant the appropriate

information at year end to file a return rather than paying someone to do it

for you.


A CPA can make sure that your business gets the proper deductions, files the

proper returns, pays its taxes on time, etc.  An attorney can make sure that

you file the correct papers for the entity that you select for your company

and tell you what paperwork would need to be done to keep your company

"alive" in the government's eyes.  As an example, in Colorado we file a

corporate report every other year to keep the company in good standing with

the Secretary of State.  If you want to save money, tell your attorney and

CPA that you would like to do as much as you can yourself and then spend an

hour with them to find out what needs to be done.  Just make sure they

review it so you know it is right the first time!


Good luck.


Teri

"If you always give, you will always have."

Chinese Proverb


-----Original Message-----

From:

ownershocker [dot] com

 [

ownershocker [dot] com]On">mailto:ownershocker [dot] com]On

 Behalf Of Unger,

Russell

Sent: Saturday, January 09, 1999 4:18 PM

To:

'flashershocker [dot] com

'

Subject: FLASH: OT: Business Question



Hi Folks...


Quick little OT question...


I'm doing the whole "Incorporated" thing, and I've been picking up so much

business that I actually think it's time to start behaving like a business

for real, with my freelance gigs.


Can anyone recommend any software or materials to assist me with that?  You

know, "How To Run Your Business '99" or something...


Thanks!


Russell E. Unger


Modern Business Technology

1300 E. Woodfield Road, Suite 302

Schaumburg, IL 60173-4984

tel: 847.605.1917 x256

fax: 847.605.1905

rungermbtinc [dot] com

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