Originally Posted By: Russell Stephens
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I was wondering what you all think about incorporating. Just wondering if the benefits out weigh the con’s.
I was wondering what you all think about incorporating. Just wondering if the benefits out weigh the con’s.
Originally Posted By: jhagarty
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Joseph Hagarty
HouseMaster / Main Line, PA
joseph.hagarty@housemaster.com
www.householdinspector.com
Phone: 610-399-9864
Fax : 610-399-9865
HouseMaster. Home inspections. Done right.
Originally Posted By: Aaron Rosenbaum
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I think incorporated has pros and cons. I think there is a lot of more “work” to be done (as in paperwork), but less taxes taken out and someone can’t sue you for all that you own (because the “company” owns it).
I'm a Sole Proprietor. I remember that a former IRS agent said that if you make over 70,000 that it might be a good idea to be incorporated.... just for tax reasons. I think being a SP is easier (in my opinion), but I'm just getting started. Also, if you are incorporated, when you subcontract work out (like radon testing, paint testing, etc....) I do believe that you need all their insurance numbers, etc.
Big pain in the a**
But like Joseph said....check with your business attorney or tax man.
Originally Posted By: mpatton
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Check and see what benefits your advisor tells you about (LLC) Limited Liability Company. I found the benefits currently better for myself.
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Michael Patton
AA Home Inspection
Serving Northern KY & Greater Cincinnati OH
AA@AAHomeInspection.net
www.AAHomeInspection.net
Originally Posted By: Russell Stephens
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Thank you all for your input I greatly appreciate it.
Originally Posted By: rray
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I had thought about LLC, but my real estate attorneys, my CPA, and my tax attorney advised me to go S Corp. All of them stated their reasons (and you’re getting some free advice here on my nickel, but still check with your own attorneys) as being that LLC is a relatively new type of corporation. Since there is little case law or legislative law at this point, it raises a flag with the IRS. My tax attorney said that 90% of all LLC’s get audited simply because of the lack of case law concerning them.
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Home inspections. . . .
One home at a time.
Originally Posted By: mpatton
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Russel,
Thanks for the heads up, on our good friends the IRS. If I remember correctly the LLC has been "adopted" state by state since the early to mid 90's, I wonder if (hope) the advice provided to you again is related to California, (but the feds are not state driven).
My advisors never commented on the IRS audit, everything else has worked out fine for me. Now you are going to make me check it out again and see if I need to change just so I can stay away from our good friends.
Thanks,
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Michael Patton
AA Home Inspection
Serving Northern KY & Greater Cincinnati OH
AA@AAHomeInspection.net
www.AAHomeInspection.net
Originally Posted By: rray
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Especially if you are a home-based business, get really good advice. Home deductions raise a red flag with the IRS to begin with, and when you start giving them multiple red flags, well. . . .
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Home inspections. . . .
One home at a time.
Originally Posted By: jhagarty
This post was automatically imported from our archived forum.
–
Joseph Hagarty
HouseMaster / Main Line, PA
joseph.hagarty@housemaster.com
www.householdinspector.com
Phone: 610-399-9864
Fax : 610-399-9865
HouseMaster. Home inspections. Done right.
Originally Posted By: rray
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| Joseph Hagarty wrote: |
| Home based businesses can be a Red Flag to the IRS, but a legitamate business is entitled to business deductions as the Fortune 500 is.
Make your investigation into Business Incorporation a step and a part of your business startup experience. This will apply to any business venture and not a specific one. |
I actually think that it does apply to specific businesses, as does the IRS apparently. That's why certain businesses, like home-based businesses and LLC's, get audited more often than certain other businesses.
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Home inspections. . . .
One home at a time.
Originally Posted By: jhagarty
This post was automatically imported from our archived forum.
–
Joseph Hagarty
HouseMaster / Main Line, PA
joseph.hagarty@housemaster.com
www.householdinspector.com
Phone: 610-399-9864
Fax : 610-399-9865
HouseMaster. Home inspections. Done right.
Originally Posted By: rray
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| Joseph Hagarty wrote: |
| I don't believe the IRS specifically targets Home Inspection companies for audit as you are seeming to suggest. |
I think my post says home-based businesses, which many, many home inspection companies are. I'm a franchise with seven employees and am a home-based business.
The IRS has targeted home-based business for decades, since my home-based business was audited in 1973, 1974, 1975, 1976, 1977, 1978, 1979, 1980, 1981, 1982, 1983, 1984, 1985, 1986, and 1987. I finally left the home-based businesses in 1987 but returned in 1993. I was not audited in 1988, 1989, 1990, 1991, or 1992, even though my income was double, triple, and quadruple what I ever made with my home-based businesses. I was audited in 1993, 1994, 1995, 1996, 1997, 1998, 1999, 2000, and 2001, and expect to be audited for 2002 and 2003, all back with home-based businesses.
Any good tax attorney will tell you that a home-based business and those nice home-based business deductions raises a red-flag with the IRS. And if you can make friends with some IRS auditors (I have two such friends in Austin, Texas, courtesy of past audits), they'll also tell you that the IRS targets home-based businesses.
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Home inspections. . . .
One home at a time.
Originally Posted By: rray
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| Joseph Hagarty wrote: |
| This thread is getting off topic. |
Not really. The type of business one creates concerns a lot of factors. IRS audits is one of those factors.
| Joseph Hagarty wrote: |
| My decision to be in business was not influenced by fear of audit. |
Nor was mine. The type of business I create certainly is influenced by fear of audit. I don't fear the audit itself per s? because I hire good tax attorneys and good CPA's and I keep immaculately detailed records. However, the time I have to take out of my work schedule to respond to an audit is time that I don't get to spend making money.
I get enough audits as it is because of the type of businesses I have. I really don't need to throw the dog any more bones, so I chose to go S Corp instead of LLC, which is what this thread is about.
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Home inspections. . . .
One home at a time.
Originally Posted By: ekartal
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I live in Iliinois and my attorney claims Inc. was not an option. The state
sees the HI business as a profession that is regulated therefore a PC
(Professional Corporation) was the best I could do, other than L.L.C.
Someone let me know if he is wrong!
Erol
Originally Posted By: rray
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I and my California attorneys would never argue with you and your Illinois attorneys about Illinois law.
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Home inspections. . . .
One home at a time.