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Starting a content writing services website do I need to create a corporation too? My clients will have the option of paying via paypal and credit cards, although I still dont know whats the most efficient way of getting paid, still researching but welcome to suggestions. my main concern now is the corporation/ LLC.
Now, this is an online company it doenst have a physical address as I dont need to talk to client in person, I will not have an office but I do, live in NYC
The main reasons for choosing a S-Corp or LLC is liability and tax purposes. Is there a chance you could get sued? Especially for large amounts of money? If yes, then you can choose either business type. Do you plan on having high revenues and high profits, I'm thinking $50,000+, then S-Corp is likely the way to go.
For your type of business, I personally wouldn't do anything your first year except setup a bank account for your business and try to keep your business and personal money separated, transfer a certain amount each month or so for your personal pay, if you can afford to pay yourself. Try to stay organized, you will really appreciate it come tax season. It seems like you could get away with just a sole-proprietorship, so in my opinion save the money on LLC or S-Corp fees. Unless you just start making money hand over fist, then change to a S-Corp. Doing self-employment taxes as a sole-proprietorship is fairly easy, it gets more complicated as a S-Corp. In a S-Corp you really will have to be careful keeping your personal money and business money separate, plus the actual taxes are more complicated as well. In a sole-proprietorship it matters little how you organize your bank accounts and how you spend money, or even where you put money. In a sole-proprietorship all your income minus expenses will be taxed, regardless of where the money goes.
I own a restaurant which is a LLC, do my own taxes, and most of the time it's just fine. Occasionally I'll see something on the business credit card, and be like, how is that business related... lol not a big deal, but it does doing taxes more difficult down the road. I use an online website to do my taxes.
What state are you in? Some states are super easy to setup a LLC or S-Corp. I did it all online in about 20 minutes. Cost me $450 if I remember right and there is an annual fee as well. S-Corp is a little more expensive, but you can save that in taxes if done properly.
I personally have a set profit line, if I hit that I will switch to a S-Corp from a LLC. I choose an LLC for 2 main reasons, one I knew how to do the taxes, and 2 I need liability protection. People could get sick eating my food, slip on some water, the building could burn down from the kitchen, an employee could cut their arm off, etc etc. There are plenty of ways a restaurant could be liable for doing a lot of damages, so for me it just makes sense. For you, it's not so clear to me, and I don't see a big need for liability protection.
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