It has gotten to the point where authoring is no longer a hobby. I have money coming in and money going out and I need to do a better job of keeping track of everything. Now that I am advertising I have money going all over the place and when tax time comes, I'm going to be screwed if I don't get things in order.
I need help forming a business in Florida. I figured I would call it Katie Leone - author. I don't know if I am a corp, an llc, or what not. Anyone know what they are doing and can help, let me know. I need to get a separate bank account and other things as well to keep track of expenses. Luckily I am not so far behind where I don't know what's come in and gone out.
Please help.
Comments
As much as I loathe to say
As much as I loathe to say this, your best bet is to ask a Tax Lawyer in Florida. Forming a company could do all sorts of weird things to your taxes. It is best to check that out before you form a company.
First an LLC is a corp, just
First an LLC is a corp, just a limited one. You shouldn't need a full corp, just a Limited Legal Corp. Second the reason for making a LLC is to prevent problems in case of bankruptcy, or a lawsuit that might lead to bankruptcy. In a sole proprietorship if the company loses money, then YOU are responsible for covering the losses, and can lose your house, car, and any other major assets. For a LLC, if it loses money, only things owned by the LLC can be taken, of coarse that makes it more likely to go bankrupt, but it saves you and your assets.
The one thing is you MUST file the proper forms in advance to create the LLC or it isn't legal, and won't protect you. You also have to be careful to make sure ALL finances from BEFORE you file are in YOUR name, and any from AFTER are filed in the LLC name (you can set it up so the LLC will be formed at the end of the month/quarter/year you filed it in). You also need to figure out if you want to get your profit as a 'salary' with income tax, but a write-off on the LLC taxes (expenses), or if you want to issue a dividend to the (sole) shareholder with investment taxes, etc.
After you figure out the LLC part (but before you file it), you should look into hiring a CPA, they can be hired on a limited basis just to take your receipts and financial papers, and track them for taxes. Or at the very least get some decent accounting software that will take some of the load off you.
I'm certainly no expert, but
I'm certainly no expert, but you might save your money and not form a business entity (a corporation). Just keep careful track of your business income and expenses (advertising, etc) and file a Schedule C with your 1040 tax return.
http://www.irs.gov/uac/Schedule-C-(Form-1040),-Profit-or-Loss-From-Business
Dealing with a tax attorney or accountant and forming a corporation might just eat up your meager profits. If you're concerned about liability (which is probably small as an author) put your money into an umbrella liability add-on to your home owners insurance policy.
Kris
{I leave a trail of Kudos as I browse the site. Be careful where you step!}
DBA
I don't know about Florida, but in Oregon a simple DBA (Doing Business As)registration would do. Then it's simply a matter of opening a checking account under the name of a DBA and running all moneys in and out through that account.
You can list yourself as an employee and money you pay yourself is then a business expense. Of course there will be personal taxes to be paid and you would have to get a business license and pay local business taxes.
All in all it might just be simpler to invest in some simple business software like Quick Books and simply track it there as personal income.
Hugs
Patricia
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