# thoughts and opinions sought



## wyowoodwrker (Apr 2, 2013)

Ok so after some discussions my wife and I have decided that we are sick and tired of being under someone else's thumb. We want to have our own say on how much.and when we "work" She wants to file an llc to our little craft show deal we have. This seems to be a bit of overkill to me for what little we have sold, and the amount of time and energy spent keeping track of every pencil and paper clip....exaggerated I know but more effort then I think there is reason for....she cites the tax write.offs for utilities, materials, ect....then you run into the HO insurance not liking my wood shop "business" in the house losing the insurance or trying to find a shop that the "business" can afford.......ect ect ect...

I just don't think all that headache is worth the benefits..... So hence my posting asking my new friends their thoughts?
:dunno:


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## rdnkmedic (Apr 2, 2013)

This ought to be interesting. I too, would love to stop working for "the man." I want to be the man. Although my wife and I are not as far along as you and your wife are i will be very interested in what is said here. C'mon guys, help us out. any thoughts or suggestions will be appreciated. 

Hope I haven't hijacked the thread but I am sincerely interested in this also.


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## davidgiul (Apr 2, 2013)

wyowoodwrker said:


> Ok so after some discussions my wife and I have decided that we are sick and tired of being under someone else's thumb. We want to have our own say on how much.and when we "work" She wants to file an llc to our little craft show deal we have. This seems to be a bit of overkill to me for what little we have sold, and the amount of time and energy spent keeping track of every pencil and paper clip....exaggerated I know but more effort then I think there is reason for....she cites the tax write.offs for utilities, materials, ect....then you run into the HO insurance not liking my wood shop "business" in the house losing the insurance or trying to find a shop that the "business" can afford.......ect ect ect...
> 
> I just don't think all that headache is worth the benefits..... So hence my posting asking my new friends their thoughts?
> :dunno:


Keep it small and simple for the moment. Forget the inc. stuff. As a single proprietor you can deduct the same expenses although the IRS will be looking closely at whether your business is a hobby or the real deal. If you deduct for office/shop in house, that is a red flag to the tax boys. The office/shop has to be used for business a big majority of the time. You can deduct for miles to and from craft shows, deduct tools, electricity for machinery etc, phone used for business, insurance for business, cost to be on Wood Barter, etc.


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## Steelart99 (Apr 2, 2013)

I am not an LLC, but just use the IRS Schedule C form as a sole propietorship. I don't write off an office space (but could). I do write off materials, equipment depreciations, publications, travel expenses (legitimate), office expenses, postage, etc. It has been well worth it for me to keep track of this and report it.
Dan


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## davidgiul (Apr 2, 2013)

rdnkmedic said:


> This ought to be interesting. I too, would love to stop working for "the man." I want to be the man. Although my wife and I are not as far along as you and your wife are i will be very interested in what is said here. C'mon guys, help us out. any thoughts or suggestions will be appreciated.
> 
> Hope I haven't hijacked the thread but I am sincerely interested in this also.


No worries about hijacking threads, one of the moderators is a king of jacks :wasntme:


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## Mike1950 (Apr 2, 2013)

I have had a S corp, C corp and LLC. Mostly these entities are there for liability reasons. They are also useless for that liability protection if all and I mean all criteria are covered. Sole proprietorship is probably the way to go. Notes above about the red flags are very real. Home office- no no. When I had a home office deduction would have been legit but would also have been almost a for sure audit for my size of Biz. Felt it would be better to keep it in case I got audited to add to the deductions while they were here.
Is it worth it ??? this is not a question anybody can answer but you and you already know that. Me I was in business for 25 years. That is very nice having the independence- it was at a cost though- 60 hr weeks + in the beginning and my employees made more sometimes. The buck stops right here. You look behind and there is absolutely no buddy back there covering your backside. It is a very lonely spot. Would I change one thing- for me the answer is ABSOLUTELY NOT. But I am sorta an independent ol coot.


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## davidgiul (Apr 2, 2013)

Mike1950 said:


> I have had a S corp, C corp and LLC. Mostly these entities are there for liability reasons. They are also useless for that liability protection if all and I mean all criteria are covered. Sole proprietorship is probably the way to go. Notes above about the red flags are very real. Home office- no no. When I had a home office deduction would have been legit but would also have been almost a for sure audit for my size of Biz. Felt it would be better to keep it in case I got audited to add to the deductions while they were here.
> Is it worth it ??? this is not a question anybody can answer but you and you already know that. Me I was in business for 25 years. That is very nice having the independence- it was at a cost though- 60 hr weeks + in the beginning and my employees made more sometimes. The buck stops right here. You look behind and there is absolutely no buddy back there covering your backside. It is a very lonely spot. Would I change one thing- for me the answer is ABSOLUTELY NOT. But I am sorta an independent ol coot.


And crotchety.:davidguil:


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## Mike1950 (Apr 2, 2013)

davidgiul said:


> Mike1950 said:
> 
> 
> > I have had a S corp, C corp and LLC. Mostly these entities are there for liability reasons. They are also useless for that liability protection if all and I mean all criteria are covered. Sole proprietorship is probably the way to go. Notes above about the red flags are very real. Home office- no no. When I had a home office deduction would have been legit but would also have been almost a for sure audit for my size of Biz. Felt it would be better to keep it in case I got audited to add to the deductions while they were here.
> ...



Hold it now there are limits............:cray::cray::cray:


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## wyowoodwrker (Apr 2, 2013)

davidgiul said:


> wyowoodwrker said:
> 
> 
> > Ok so after some discussions my wife and I have decided that we are sick and tired of being under someone else's thumb. We want to have our own say on how much.and when we "work" She wants to file an llc to our little craft show deal we have. This seems to be a bit of overkill to me for what little we have sold, and the amount of time and energy spent keeping track of every pencil and paper clip....exaggerated I know but more effort then I think there is reason for....she cites the tax write.offs for utilities, materials, ect....then you run into the HO insurance not liking my wood shop "business" in the house losing the insurance or trying to find a shop that the "business" can afford.......ect ect ect...
> ...



This is along the lines of what I was wanting to do, a actual small part time "business" where I peddle my creations at craft shows and online, along with the buying/selling of materials to fellow addicts..

I don't personally care about the tax write offs, but then again maybe I should.
I appreciate all of your inputs.

Keep em coming


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## Kevin (Apr 2, 2013)

I agree with sole prop in your case also, but if you ever decide to get an LLC wyoming is one of the better states to form a LL Company. AN LLC is not a corporation. One of my businesses is an Arizona LLC because it was a better fit for that business and allowed me to use it without having to file as a foreign corp in Texas which would have put me in line to pay a franchise tax if the business ever made a pile of money. Thank god it didn't  

An LLC should never be relied upon as a single insulator from liability, but as part of a more complex strategy. Most law firms that are LLPs or LLCs have more than one layer to bust through if you ever have a cause of action to go after their assets, and so do most well-heeled businesses. This is just the opinion of a sawyer and is not legal advice.


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## wyowoodwrker (Apr 2, 2013)

Kevin said:


> I agree with sole prop in your case also, but if you ever decide to get an LLC wyoming is one of the better states to form a LL Company. AN LLC is not a corporation. One of my businesses is an Arizona LLC because it was a better fit for that business and allowed me to use it without having to file as a foreign corp in Texas which would have put me in line to pay a franchise tax if the business ever made a pile of money. Thank god it didn't
> 
> An LLC should never be relied upon as a single insulator from liability, but as part of a more complex strategy. Most law firms that are LLPs o:dash2::dash2::dash2:r LLCs have more than one layer to bust through if you ever have a cause of action to go after their assets, and so do most well-heeled businesses. This is just the opinion of a sawyer and is not legal advice.



The opinion of a very well rounded and seemingly well versed saywer. I appreciate yours and Mikes..... well everyones input. I think I'm going to stick with my SP plan and if gets to the point of needing the extra protection then will do a llc or corp. 
Now to convince the boss that I am right...... this is.going to be fun...  :dash2::dash2:


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## Dane Fuller (Apr 2, 2013)

I have an LLC & a DBA (SP). The SP is the way you want to go for now. I think you've got the right idea. THE biggest piece of advice I can give you is to get a CPA. Tax codes are hard to figure out and a CPA is a first line of defense against the feds if they ever come calling. They can also guide you when you have to start finding ways to use YOUR money.


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## NYWoodturner (Apr 2, 2013)

Nick - You really don't give a lot of specifics on the front side, so I am going to put in my two cents based on an assumption. 
Assuming you are considering leaving full time employment I would look beyond the tax implications at the two biggest expense lines on a P&L statement - wages and benefits. 
What will it take in income to sustain life as you have it, and what will medical coverage cost you on the open market. Those two lines alone snap be back in line whenever I consider doing the same.


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## wyowoodwrker (Apr 3, 2013)

Thanks for all your input guys, I do really appreciate it. I think for the time being as small as our operation is a DBA will be just fine. All it really is going to do is provide the structure for the financial flow, and have that "legal" business structure. I am just going to be selling small amounts of materials and finished goods online, through craft fairs, and local consignments. Nothing major yet just needed the structure for the money flow and expenses... 
I do have plans of leaving corporate America and starting a much simpler life. But that won't be for a few more years.


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## rdnkmedic (Apr 4, 2013)

NYWoodturner said:


> Nick - You really don't give a lot of specifics on the front side, so I am going to put in my two cents based on an assumption.
> Assuming you are considering leaving full time employment I would look beyond the tax implications at the two biggest expense lines on a P&L statement - wages and benefits.
> What will it take in income to sustain life as you have it, and what will medical coverage cost you on the open market. Those two lines alone snap be back in line whenever I consider doing the same.



This is exactly what concerns me. How many widgets have to be mad e and sold to maintain my current lifestyle. Granted my "lifestyle" ain't fancy but I do like to eat occasionally and have some heat and lights every now and then. It's a lot to think about. Especially when the cost of living and doing business continues to rise. Health insurance alone can be a majoe cost when not buying into a group plan. all good info here. Lots to think about. Thanks for the points to ponder.


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