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Vanity: I'm retired and want to become a part-time accounting consultant. Need advice on business formation. Thanks!
Legal Zoom ^ | 08/18/2022 | Self

Posted on 08/18/2022 12:16:21 PM PDT by Eccl 10:2

It's just me in the business so I can help a friend who is a building contractor. 5-10 hours a week.

So I don't want to pay large setup or annual fees.

I just don't want 87,000 heavily armed IRS agents battering my door down.

I'm in North Carolina if that matters.


TOPICS: Business/Economy
KEYWORDS: braking; breaking; businessideas; ccorp; contractor; corporation; cpa; disasterinthemaking; freelegaladvice; helpafriend; honestnigerian; legaladvice; llc; llcforthisisajoke; needadvice; nonprofit; overthinking; scorp; scorpion; scorplmao; vanity
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I would appreciate any Freeper help possible. Thank you!!
1 posted on 08/18/2022 12:16:21 PM PDT by Eccl 10:2
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To: Eccl 10:2

LLC?

S Corp?

DBA?


2 posted on 08/18/2022 12:19:15 PM PDT by Eccl 10:2 (Prov 3:5 --- "Trust in the Lord with all your heart, and lean not on your own understanding")
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To: Eccl 10:2
If you go as an independent contractor, it's more difficult to deduct expenses. I'd suggest an LLC.

How to Start an LLC in North Carolina

3 posted on 08/18/2022 12:19:33 PM PDT by Repealthe17thAmendment
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To: Eccl 10:2

You should do research for your own state, but generally just set up an LLC. Low-cost, easy to do. You may want to look at doing an S-corp, but again up to you and your state and doesn’t consider your any possible state professional licensing rules.


4 posted on 08/18/2022 12:20:45 PM PDT by Obadiah (Finishing is better than starting.)
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To: Eccl 10:2

LLC is the way to go IMO. LegalZoom works.


5 posted on 08/18/2022 12:22:15 PM PDT by JonPreston
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To: Eccl 10:2

Why not just keep it simple with a sole proprietorship & file a Schedule C? There would be no set-up cost for a sole proprietorship.

You can get a FEIN (tax ID) for a sole proprietorship if you don’t want to have your SS# on documents or invoices. You can get this online at the IRS website, no cost.

You can file for a DBA to use a more professional business name other than your personal name. The DBA would be minimal cost.


6 posted on 08/18/2022 12:22:37 PM PDT by gubamyster
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To: Eccl 10:2

Check the website for the Department of State in your state. You have to file some paperwork with the state. You should also have articles of incorporation for a corporation or membership agreement for an LLC.


7 posted on 08/18/2022 12:22:40 PM PDT by brookwood (Government discriminates against you, and if you complain, calls you a racist.)
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To: JonPreston

Most states let you file an LLC youself.

CA takes 5 minutes on the SOS website.

Legalzoom is too costly imo.


8 posted on 08/18/2022 12:23:46 PM PDT by SPDSHDW (Buy JHP ammo, Level 3/4 armor and rifles. Won’t be able to for much longer, and we’re gonna need em)
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To: Eccl 10:2
You really should be speaking to a CPA in NC.

My wife has her business set up as a Sole Proprietor. Her income and tax deductions get added onto mine. We use it lower my W2 taxable income with write offs.

9 posted on 08/18/2022 12:24:12 PM PDT by woodbutcher1963 ( )
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To: Eccl 10:2

I don’t know about the laws in North Carolina but here in AZ you can just file a business return as an individual for the income from your consulting business. BUT it’s imperative you keep meticulous records and receipts. You want the results of any tax audit to be a refund from the government. If you think you might need protection you can file a LLC but if you are basically going to only have one client you don’t need to go to all that trouble (unless your state requires it)


10 posted on 08/18/2022 12:25:30 PM PDT by McGavin999 (To shut down the border tell the administration the cartel is smuggling Ivermectin )
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To: Eccl 10:2

DBA...I did it for years.


11 posted on 08/18/2022 12:26:44 PM PDT by Sacajaweau ( )
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To: Eccl 10:2

Sole prop. For now. If it gets bigger deal with it later.


12 posted on 08/18/2022 12:27:02 PM PDT by conservative98
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To: SPDSHDW

I wish I had known that but including trademark registration, it wasn’t too bad.


13 posted on 08/18/2022 12:28:09 PM PDT by JonPreston
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To: Eccl 10:2

There is zero tax advantage for a LLC over a sole proprietorship. A Single Member LLC is a disregarded entity for IRS tax purposes & you would still file a Schedule C. The LLC is subject to self-employment tax, same as a Schedule C.

The S-Corp would help you bypass some of the self-employment tax, but you would need to do payroll, or hire a payroll company.

It depends on your Gross Income & Expenses and how much Profit you expect to make whether it is worthwhile to set up an entity. Also, how long do you plan on doing this? If only a for a year or two, then it might not be worth it.


14 posted on 08/18/2022 12:28:11 PM PDT by gubamyster
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To: gubamyster

I agree. For one client, 5-10 hours a week, S-Corp is definitely overkill, but LLC is likely more than needed as well.


15 posted on 08/18/2022 12:29:05 PM PDT by 9YearLurker
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To: gubamyster
I agree 100%. I filed a DBA so I wasn't named directly..only on the recording document in the Clerk's Office.

Schedule C...office in home...no problems.

16 posted on 08/18/2022 12:29:13 PM PDT by Sacajaweau ( )
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To: Eccl 10:2

actually the irs is hiring ;)


17 posted on 08/18/2022 12:29:15 PM PDT by joshua c (where did my tagline go?)
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To: Eccl 10:2

I would consider re retiring and do it right next time since you want to un retire


18 posted on 08/18/2022 12:29:33 PM PDT by NWFree (Somebody has to say it 🤪)
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To: Eccl 10:2

You should ask your accountant.


19 posted on 08/18/2022 12:31:49 PM PDT by 1FreeAmerican
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To: Eccl 10:2
Register an LLC in your state. It is the cheapest and safest way to start a small business. Get a Federal Tax ID to go with it.

Open a separate business checking account with your local Credit Union. It is cheaper than an account from a bank. Deposit all business payments to this account, then transfer funds to your separate personal account as needed.

Transfer your tax reserve to the savings account that goes with your business checking account. Then you will always have enough on hand to make your quarterly tax payments. Do this every month. Do not ever skip this step and do not raid the tax fund for any reason. Oh, and make those quarterly tax payments on time, every time.

Best of luck to you!

20 posted on 08/18/2022 12:32:22 PM PDT by flamberge (Those who pose the greatest danger to you are living within five miles of you.)
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