Looking for Financial Advice.

I need to find someone who knows a little about setting up a Corporation or L.L.C. if any of you fine people have ever done something like this please let me know. Thanks

What specifics do you need to know.  I have set up corporations in Texas.  My wife has set up about 50 LLC's etc. in Florida for shopping centers through her attorney's.   Maybe, between her and myself we can answer some questions. ([email protected]) Mike

Never gone the LLC route myself, because I hate having partners. LOL However, I have done a few incorporations, including a few non-profit corps. What are you trying to do? JP

Hi Dan, in the state of Florida you want to file for a corporation in the state of Florida and then file to be an S-Corporation designation from the federal government.  In Florida, as you know there is no personal income tax.  Florida is also one of the few states that does not have a corporate income tax.  In an LLC, partnership, or sole proprietorship, you must pay self-employment taxes on all of your income.  This is the employee portion you pay today getting a paycheck from someone else as well as a the employer portion.  So for the sake of the math, let's use 100,000 as the amount of money that would go to you from the company regardless of the type you set up.  For any of the 3 entities (LLC, partnership, sole proprietorship), you would pay 15.3% or $15,300 in self-employment (technically that maxes out at 97,500 this year but for the sake of this example, let's say you pay that on the whole 100k). So your taxes for the year will be $15,300 + your Federal income tax after deductions. OK, in an S Corporation, all of the income in the business flows through to your personal income.  You want to do this and not a C-Corporation because a C-Corporation is taxed at 31% tax rate for  profits.  An S-Corporation is great (if you are owning the company yourself) in that the income from the company is passed through not as W2 wages subject to Self-Employment Tax, but as Dividends.  It takes a little planning but here is how it works.  If you realize that your federal income tax is going to be $12,000 after your deductions are taken into consideration, you set your W-2 wages to be somewhere around $30,000 a year in that case.  The rest of the $100,000 (or $70,000) you take as a dividend.  You won't pay the self-employment tax on that $70k so that means you have (70k*15.3%) or $10,710 extra dollars to use for something else than paying to Uncle Sam.  The best thing to do with this money is put it into a Simple IRA.  There are also benefits because this money actually comes out before tax and the company can match up to 3% of your w-2 wages which also lowers your taxable amount.  Bottom line is that you have about $11k or more that you can put into your own retirement account that is not subject to Social Security running out of money.  It's yours and will always be yours.  Now the downside of this is that your Social Security amount will be less than if you took all your money as W2 wages.  But you must assume that if you put the funds in a Simple IRA, and then invest them in a mutual fund that matches the market, you will achieve gains (if the next 40 years match the previous) of about 11.8% return.  SS returns 2% return.  Even if you put your Simple in T-bills you can double the return on Social Security. I'm making the assumption here that you are the sole shareholder in the S-Corporation.  If there are multiple people, the dividends or profits must be distributed equally.  I'd be happy to answer any questions you might have.  I am an Owner and sole shareholder in a an S-Corporation and it has worked out really well.  Bottom line is you want to get advice from a good accountant in your area.  They will be a key advisor for your business on many areas, not just this one.  I incorporated with this company called The Company Corporation.  http://www.corporate.com/  You get a corporate seal and stock certificates, etc.  Hope this helps. Greg

Thanks guys I appreciate the advice.