Company: LLC, C-Corp, Sorp – Taxes on Just Profits!?
I am currently working with a few CPA Networks. [NeverBueAds, Azoogle, Copeac]
I am doing around 1/k month now, and I don’t know what I should do about Taxes. All that 1K of revenue is not pure profit, I also have expenses that are used to make that money, about 1K/month. I need to fill out a W-9 form before I could get my earnings. However, I just do it under my own name, as there is really nothing to worry about.
However, would I need to set up something, like a LLC or something, I feel I should only pay taxes in my profits and not on all revenue. So I would be writing off computers, internet, % of my home for office space, and then other things related to my Search Marketing process.
Thank you for any information you may have.
You can very well continue as you are doing right now — sole proprietor. You don’t have to complicate your life and create an LLC, C corp or S Corp in order to deduct your business expenses.
Use Schedule C to list your income and expenses. You can deduct from your taxes your business expenses such as webhosting fees, advertising fees, purchase of computers, office supplies, even do home business deductions if you operate your business from home.
Read the following IRS publications
Small Business and Self-Employed One-Stop Resource http://www.irs.gov/businesses/small/index.html — this is the main page with links to what qualifies as business deductions.
Schedule C instructions http://www.irs.gov/pub/irs-pdf/i1040sc.pdf
Business Use of Your Home (for home based businesses) http://www.irs.gov/pub/irs-pdf/p587.pdf
If your business grows and you get partners for your business, or if you expand your business to another field, then you can consider changing your legal structure to S corp, C corp or LLC.
I highly recommend buying the latest version of the book JK Lasser guide to taxes for small business owners, as they itemize all possible deductions you can get as a business owner.
check out this site it has professional tax people that can tell you what to do.
This is additional income on top of your other main income. Thus, you need to file this as additional income on your 1040
You can try setting up an LLC. I think you would still have to consult with an accountant about taxes not matter what business structure you form.