AboutRichard Fritzler Expertise I am in the business of tax planning for business owners. Our company helps business owners structure so that they can be reduce the taxes that they owe, making them far more profitable.
Experience Since 1986 I have been helping successful business owners reduce taxes, protect assets, and limit their liability. The company is Owelesstax, incorporated at www.owelesstax.com
Organizations National Small Business Owners Association.
Nevada Association of Listed Resident Agents.
Citizens Legal Association
The Business Owners Institute
Publications Contributing author to "The Corporate Standard Newsletter".
I am also a writer for an email newsletter about business
Googlegroups/Successfulbusiness
I am also an Expert in the areas of Tax Law, Retirement Planning, and Estate tax issues.
Expert: Richard Fritzler Date: 2/6/2008 Subject: Form LLC Or Corp?
Question QUESTION: I am an independent contractor with a sales company, and I am wondering if I formed an LLC or(?), would I still have to combine my income with my husband?
ANSWER: The LLC is considered a "disregarded entity" by the IRS, they do not recognize it for tax purposes and you would still be considered a Sole Proprietor for tax purposes. so yes it would still be combined with your husbands income.
If you are profitable, then you should consider operating your business as all of the most successful businesses do. . . as a real corporation.
You may have heard people adamantly oppose operating as a real corporation. They may use phrases like "double Taxation" or "you Can get assets out", or any number of other Fear Mongering claims; and I could explain everyone of them away, but let's look at this from a distance.
How come, all of the most successful business in every industry are real corporations? Do they not have friends and tax preparers to tell them how wrong it is? Are they just crazy and ignore the conventional wisdom? Or have they not heard it because they didn't hire a "Strip Mall accountant"? Instead they hired accountants that didn't work in strip malls, they hired accountants that worked in really big buildings that are owned by . . . real corporations.
Richard Fritzler
www.owelesstax.com
www.nevadacorporateservices.com
phone 800 590-6612
---------- FOLLOW-UP ----------
QUESTION: what are the tax advantages of becoming a corporation from a tax perspective? What are the disadvantages? Does this separate my income from my husband's income to avoid having to pay 42% tax? Can you explain please? Thanks you so much!!!!
Answer The Corporation pays it's own tax, which does separate your income from your husbands.
The Corporation pays a lower tax. Federally: 15% on the first $50,000 "Of Net Profit", only 22.25% of the first $100,000 "Of Net Profit", etc. This is far lower than your personal tax rates. Corporations pay no FICA/Self Employment Tax/Social Security, Medicare in its income.
I quoted Of Net Profit in the previous paragraph because this is an important distinction. You personal pay taxes on Adjust Gross Revenue, and it is "adjusted" by very little. Corporations Have a Plethora of Business deductions available, and are not limited as you personally are. You are personally limited by AMT and Phase Out.
The down side:
You'll have to be well informed and actively manage your own affairs. But as a business owner you already understand that.
