March and April are normally difficult months for many people. It takes at least two bags of potato chips and a House marathon to avoid spending the weekend looking for receipts, 1099 slips and all the other paraphernalia our CPAs need. When the task takes on all the elements of climbing Mount Everest, we finally get the papers together, then go through a couple of bottles of wine or a six pack waiting for the verdict – do I owe or don’t I owe? And if I owe, how much? Of course if you have a good bookkeeper on your team, you can skip the chips and go directly to wine.
This year there seems to be a lot more stress. Many small businesses that would otherwise fly through tax prep are faced with an undeniable fact – profits have vanished. It has been a struggle in much of 2008 and now in 2009 to pay the bills, pay employees, and finally pay ourselves – or not. Profits are thin to nonexistent so none of us can afford to throw away a single dollar, especially on taxes.
Why is it, then, that so many people earning $50,000 or more after expenses and before paying themselves are still sole proprietors? The main reason is that no one told them they were overpaying their taxes. Depending upon how much revenue you bring in and how much money you pay yourself, this overpayment can represent thousands of dollars. Yes, you could be paying thousands of dollars in self-employment taxes that you do not need to pay.
The cure for this ailment is quick, easy and perfectly legal. Really. I do it for clients all day long. All you need to do is put your business into the right entity with the right tax election; then follow some simple rules that we teach you. So what would you do with a few thousand dollars more? Buy a new computer? Invest in some marketing? Pay yourself? Give to charity?
Whatever your reasons for wanting to put more in your pocket than you give to the government, come talk to us. Just email us at info@yourentitysolution.com or call 702 506 0190. You don’t get the benefits until the entity is set up, so don’t procrastinate. House – or any other favorite TV show - can wait.
Showing posts with label Entrepreneurs. Show all posts
Showing posts with label Entrepreneurs. Show all posts
Monday, March 09, 2009
Why Won’t They Hire Me?
You are an excellent consultant. You are professional. You know your topic. You have great people skills. You deliver on your commitments on time and on budget. Your client has the money and they are looking for someone to help with their project – someone just like you – no, someone who is you. So why won’t they hire you?
When you try to find out, the Project Manager mumbles something about rules. All they are allowed to hire are other companies. Frustrated and sad, you walk back to your car. How can they possibly have a rule like that? Not everyone is IBM.
You became a sole proprietor so you could work your own hours on the projects you like for a fair price and put the money into your pocket, not the corporation’s. Now you’re finding it hard getting the projects you really want. Do you need to work for a management agency to get the work you love? Absolutely not!
Several years ago a very large corporation ended up in trouble for hiring certain people as independent contractors when in almost every respect they were really employees. It cost the corporation a small fortune to fix. When something like this happens, word gets around fast; and even years later no other business wants to find itself in the same position.
The Internal Revenue Service has strict rules on who qualifies as an independent contractor; and if you, the business, get it wrong, you could be liable for paying that hire’s payroll taxes and benefits on top of the contract price.
Most corporations avoid this issue altogether by hiring only companies to supply independent contractors. Are all these companies the size of IBM? Of course not. Here’s the solution to your dilemma – you can be your own company. Yes, John Smith can be an employee of Advanced Project Management, Inc. or Smith Enterprises, LLC. Your client would contract with your corporation or limited liability company for your services. You would be unable to take them court, claiming you are really an employee of their corporation, because the corporation did not hire you – it hired your company. Problem solved. While you will still be working to put money in the company’s pocket rather than yours, you will at least own the company and can get the money out.
Want to find out more? Email us at info@yourentitysolution.com or call 702 506 0190. We specialize in helping new entrepreneurs get started.
When you try to find out, the Project Manager mumbles something about rules. All they are allowed to hire are other companies. Frustrated and sad, you walk back to your car. How can they possibly have a rule like that? Not everyone is IBM.
You became a sole proprietor so you could work your own hours on the projects you like for a fair price and put the money into your pocket, not the corporation’s. Now you’re finding it hard getting the projects you really want. Do you need to work for a management agency to get the work you love? Absolutely not!
Several years ago a very large corporation ended up in trouble for hiring certain people as independent contractors when in almost every respect they were really employees. It cost the corporation a small fortune to fix. When something like this happens, word gets around fast; and even years later no other business wants to find itself in the same position.
The Internal Revenue Service has strict rules on who qualifies as an independent contractor; and if you, the business, get it wrong, you could be liable for paying that hire’s payroll taxes and benefits on top of the contract price.
Most corporations avoid this issue altogether by hiring only companies to supply independent contractors. Are all these companies the size of IBM? Of course not. Here’s the solution to your dilemma – you can be your own company. Yes, John Smith can be an employee of Advanced Project Management, Inc. or Smith Enterprises, LLC. Your client would contract with your corporation or limited liability company for your services. You would be unable to take them court, claiming you are really an employee of their corporation, because the corporation did not hire you – it hired your company. Problem solved. While you will still be working to put money in the company’s pocket rather than yours, you will at least own the company and can get the money out.
Want to find out more? Email us at info@yourentitysolution.com or call 702 506 0190. We specialize in helping new entrepreneurs get started.
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