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Date Created:
March 29, 2008
Category:
Money & Work »
Professions & Workplace Issues
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Entrepreneurs
So you want to create your business and be your own boss? It's an admirable ambition but be sure to kick-start your aspiration with a solid business plan and the right tools. Share and discover sage advice, start-up resources, cautionary tales and inspiring stories.

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Moi5646 said:
on October 19, 2009 06:16 AM ET

I was collecting SSI/SS for a disbilities until last year when I decided to become the Soul of my Sole proprietor small business. It didn't have a chance to have a client as I placed it on pause to help a friend get his Military contract solid. It is very solid now and I am his 'Director/Supervisor and Crew Lead' otherwise what I call An ARMY of Moi`. However, I am bone weary and my disibilities making it more and more difficult to keep doing the kind of labour I am. I can't afford to stop working though. I am stuck.

Now I want/need to ease on out of that Part-Time night job and really get my own moving. My first step was making it into an LLC. As of next month I will put my paycheck into my LLC. My god-son willing to be partnered with me as my focus is to leave it all to his son.

Until then here are my Qs and yes, I am very new at this and DO NOT want to mess it up so I welcome any and all mentors: what is a tax shelter? how do I go about making my LLC one if possible? how do you know how much to set aside for tax time and SS? I will be the only employee until such time as client increase requires I hire someone and can afford all that comes with having one. what other things do I need to know and do?

 

Thank you for being here for us taking that scary first step.
2 posts by 2 users
JARivera
Post #2
JARivera replied to rgdm's Post #1 :
on October 19, 2009 03:36 PM ET

I would recomend you concentrate in making your business PROFITABLE. Review your financials, Balance Sheet and Profit and Loss Statements and compare them to your PLAN progections. This you should do on a MONTHLY basis. Get someone with an accountinng degree that can advise you as to how the Balance Sheet and P&L Statements look and adjust your marketing decisions accordingly.  You should see your P&L Statement withing the first 10 days after the closing your monthly books. DO NOT allow the accountant recomend a quaterly of a semi annual statements. Doing this, you are running a business BLIND and most likely will fail.  Any and all profits or losses from your business in your LLC you will declare it in your personal income FORM 1040 at tax times.

After more than 25 years as a small business consultant I have found that not doing the above is the main problem with small business going out of business.


rgdm
Post #1
rgdm said:
on October 19, 2009 12:29 PM ET

Tax shelters are things that help reduce your taxes, such as interest on mortgage loans, property taxes.  Having a home based business is also a tax shelter because you can get credit for part of your utilities, the square footage that you use in the home, etc.

 

To find out answers to your other questions, to to www.irs.com and there is a list of deductions.  You should also google your questions on the internet.  The answers may be different depending on the slant each person gives, so you will have to figure out what works for you.  The IRS is definitely the place to change from LLC to individual tax.  You will have to retire the LLC employer number that has been issued to you, I think.  Ask them for sure.