I've been on this board for a long time. I did this a few years ago and got completely flamed, but hopefully the group has grown up...
It is near the end of 2005 and a lot of you are self-employed 1099 income earners which means that you are unnecessarily throwing away much of your money to the government every year as well as opening yourself up personally to liability for monitors falling on people's heads, liability for electrocution - anything really - real or imagined - even liability for spilling coffee that is too hot in your studio on a client's lap - they can take your home, your car, your bank account. Even if you have $1,000,000 in insurance, judgements can easily eclipse this - and guess who pays the balance?
Anyone that is interested in learning about incorporating and how it can help you personally - in YOUR situation, please contact me directly. For those of you that don't know, I am with Incorp which is one of the largest Incorporation, Estate Planning, Registered Agent and Asset Protection companies in the country with 20,000 clients internationally including everyone from mom and pop home businesses to ebay merchants to sports figures to churches to adult film stars to Fortune 500 CEO's.
There are multiple things we can do - for example, even if you do not live in the states of Nevada or Wyoming, you can utilize entities in these states to reduce or eliminate your domestic tax liability in your state. You may be required to foreign file in your state as well.
Additionally, we can assist with Living Trusts, Family Limited Partnerships and other entity types. A lot of you also have done some real estate investing - and if you have real investment property in your name, I cannot stress enough that you get it out of your name! Additionally, if you have children, you need to put together a living trust - these days, even a will is essentially meaningless and always contestable.
Anyone wishing to actually put a plan together, I will give a substantial discount to for being a MOTU member. We can also work with your attorney or CPA to explain your plan to their satisfaction.
Feel free to post any questions on this topic.
~Doug
http://www.incorpservices.com
Questions about Incoporating vs. Self-Employment/1099 Income
Moderator: James Steele
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For discussion of the music business in general from studio administration, contracts, artist promotion, gigging, etc.
For discussion of the music business in general from studio administration, contracts, artist promotion, gigging, etc.
Questions about Incoporating vs. Self-Employment/1099 Income
Last edited by dougieb on Fri Nov 25, 2005 6:06 pm, edited 1 time in total.
Re: Questions about Incoporating vs. Self-Employment/1099 In
Wow. Are you from the future?dougieb wrote: It is near the end of 2006...
Seriously though sir, Your point about liability is well taken, but I don't think people come to forums like this to be spammed for personal financial services.
Re: Questions about Incoporating vs. Self-Employment/1099 In
RE: "2006" - yes I am from the future (lol) Actually, my personal work I actually AM working on 2006 milestones (lol)Jim wrote:Wow. Are you from the future?dougieb wrote: It is near the end of 2006...
Seriously though sir, Your point about liability is well taken, but I don't think people come to forums like this to be spammed for personal financial services.
RE: Spam... Here's the deal... I was a musician (and bandleader) for many years. I ended up owing the IRS $500,000 because I didn't know WTF to do financially (I was a musician - not an accountant). Many of my peers here in Vegas lost their houses they'd inherited from their parents. Many are STILL broke from paying off "Offer In Compromise" agreements with the IRS. I was very lucky!
I seriously WISH someone had come to me (or someone to ask) and just explained the consequences and correct way of doing things. I am just offering to have people here answer questions for the people that have them - if they want to deal with us - great - if not, take the information and do what they want with it. We are the best company in the industry, so I would HOPE that they would, but there is no law that you can't use Corporation Service Company or Corporation Trust Company. The important thing is to GET IT DONE.
A lot of people don't even know what options are out there - or who to ask. I'm providing that free of charge. AND... I haven't said exactly what we were going to charge MOTU members if they DID want something now have I?
and... finally, MOTIVATION... I'm not blowing my horn here, but I gave away 10x more to individual families in Katrina than I could ever hope to make on this post. Seriously, I don't need the money. I do remember what it was like drooling over the DX7 or the D-50 and remember having to save and save to get it. Ironically, the gear you want may possibly be purchased with the money you save.
So... no, this is not SPAM.
Re: Questions about Incoporating vs. Self-Employment/1099 In
You can call this spam if you want. What it basically is however, is damn good advice.dougieb wrote:as well as opening yourself up personally to liability for monitors falling on people's heads, liability for electrocution - anything really - real or imagined - even liability for spilling coffee that is too hot in your studio on a client's lap - they can take your home, your car, your bank account. Even if you have $1,000,000 in insurance, judgements can easily eclipse this - and guess who pays the balance?
In this litigious society, lets just call it America, you must protect yourself. People will sue you at the drop of a hat, especially if that hat bruises their pinkie toe. If you are incorporated your personal assets are separate from the corporations and are protected.
Should we be blatantly advertising our services on this board. Probably not. I doubt it fits the vision James had in mind developing this community.
However, I consider this post to be good advice in general. If you didn't know this stuff, well now you do.
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I have been told , but have not done it myslef personally, the best way to incorporate yourself to avoid the monitor on the head or the coffe in the lap is to form an LLC. What would be the advice for the guy with a day gig in the business at a company with a steady paycheck, and freelance sidework as my own company. BTW, 500,000 in back taxes.......yyyeeeeooooooouuuuuccccccchhhhhhhhhh. that burns
I-CHI-MAMA
I-CHI-MAMA
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You are correct in that assumption, and my advice in this situation would generally be to form an LLC to separate the liability of any endeavor you may undertake as an additional income stream. By using a Nevada LLC you are giving yourself the ability to have the only remedy to losing a lawsuit against the LLC be a charging order. A charging order is what the court will issue to the winner of a judgement, it allows the holder to be 1st in line when the LLC distributes it••™s income at the end of the year. No the best part of this scenario is when there is no distribution, the holder of the charging order still will be required to pay income taxes on the amount of the judgement, even though there has not been one red cent collected.mhayesmusic wrote:I have been told , but have not done it myslef personally, the best way to incorporate yourself to avoid the monitor on the head or the coffe in the lap is to form an LLC. What would be the advice for the guy with a day gig in the business at a company with a steady paycheck, and freelance sidework as my own company. BTW, 500,000 in back taxes.......yyyeeeeooooooouuuuuccccccchhhhhhhhhh. that burns
I-CHI-MAMA
The second reason for the choice of an LLC is that in the running of a business, there are everyday expenses that must be paid to allow the business to function. If the business has expenses but no real income, at the end of the year it finishes at a loss, and that loss will pass through to the owners of the LLC and can be used to offset the amount of taxable income that will be reported from the W-2 (paycheck) employment. For example, $15,000 in loss used against $100,000 of income means that taxes are paid on only $85,000, not to mention the number of items that can be expensed 100% through an LLC that can••™t be deducted by an individual operating as a sole propiertor.
Let me just say that this is not a "fix-all" for all scenarios, but I hope I've given you something to think about. Every individual case is well... individual. Additionally, you might have to foreign file the Nevada entity in your own state depending on where you are, what all you do and how much you make - but not always!
- dougieb