Self Employment

Doran Barton fozz at iodynamics.com
Fri Jul 15 17:17:05 MDT 2005


Not long ago, Hans Fugal proclaimed...
> I tried the archives because I could swear we discussed this recently,
> but to no avail. I blame the plug sysadmin.
> 
> I'm going to start doing some contract work. I always hear these
> jargon-filled statements about setting up some sort of corporation or
> LLC or something, but I have no clue what that all means yet. But I set
> up my own DNS and mail servers so maybe this is for me. ;-) Where do you
> find the manpages about this stuff?
> 
> We discussed getting yourself an accountant, that much I did find. Is
> that still good advice for part-time consulting work? Will any old (or
> young) accountant do, or do they have to specialize in self employment
> stuff?

Well, talking to a good tax accountant will be the best way to get an idea
of which business type is best for the amount of income you plan to bring
in. If you're only making a couple thousand dollars a year from your
business, an accountant may tell you to not even bother - just do
everything under your SSN and file it as "extra income." 

My accountant advised me and my partners to set up S-Corporations which in
turn own shares of Iodynamics LLC. This apparently has nice tax benefits -
something called pass-through taxation. The LLC pays no taxes. The S-Corps
can write off a percentage of their income - a higher percentage than if
they were not S-Corps, so less taxable income there too. I'm no accountant
or lawyer, but it sounded good to me. :)

-=Fozz

-- 
fozz at iodynamics.com is Doran L. Barton, president, Iodynamics LLC
Iodynamics: Linux solutions - Web development - Business connectivity
 "Go soothingly on the grease road as there lurks the skid demon."
    -- Seen in a Tokyo traffic handbook
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