To incoprorate or not..

[David Love]

I believe there can be some advantages if you form an "S" corporation.  It
shouldn't be hard to run the numbers to compare.  There are several factors
to consider which can be outlined by your accountant.

David Love
davidlovepianos@earthlink.net


> [Original Message]
> From: Scott Pickett <scottpickett@nucleus.com>
> To: Pianotech <pianotech@ptg.org>; Phil Bondi <tito@philbondi.com>
> Date: 4/27/2003 10:35:23 AM
> Subject: Re: To incoprorate or not..
>
> I'm not an accountant, and I am Canadian, so what I'm about to add should
be
> taken both with a grain of salt and modified for the arcane and esoteric
> rules which govern life south of the border....
>
> The only advantage that I have seen with respect to incorporating is
> limiting liability.  Right now, if in the course of refurbishing some
> dowager's diamond encrusted Steinway D you loose it in the river, you
> (personally) are on the hook for the bill.  That is, even if it is
insured,
> the insurance company could decide to come after you and take the money
out
> of your hide (and house, car, tools, etc....).  If you incorporate, the
> liability is limited to the assets of the company.
>
> The disadvantages to incorporating are mainly, so far as I understand,
> paperwork related.  That is, you have to file a corporate tax return every
> year (in Canada that's a T-2 or T-3, I forget) in addition to your
personal
> stuff.  Plus, you are required to have a list of officers, shareholders,
> keep a corporate minute book, etc.  Also, the corporation has to pay tax.
> So, in essence, any money the corporation makes via your piano work gets
> taxed twice: once as part of the corporations revenue, and once as part of
> your personal income.  Some of these disadvantages are offset by certain
tax
> breaks that are offered to corporations, all of which vary between
countries
> and states.  In Alberta, Canada, the rule of thumb is you should consider
> incorporating if you are billing more than $80,000.00 / yr.
>
> The best thing to do, IMHO, is to plan (after tax time) to sit down with
> your accountant and be prepared to fork out a couple of thousand
> buckadingdongs to do a detailed pro / con analysis of where you're at.
>
> There you go, for what it's worth.....
>
>
>
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