Hey, I left no stone unturned.
Now I didn't ask anything that would make my Mom embarrassed - or anything REALLY personal.
But I did ask this: What kind of business entity do you have? And do you take a salary, or something else?
(Notice, I didn't even come close to asking how much they make!)
I keep hearing the same answer from lots of business owners - LLC's seem to be very popular. Of course, it's always prefaced with, "I'm not an attorney or CPA, and don't even play one on TV..." so you should definitely consult with someone who knows your situation.
But for Pete's sake, once you're making some money, don't stay as a sole proprietor!
And for the actual "how you get paid" question - some folks take a salary, some take a distribution, and some have some other sort of arrangement.
Again, ask your attorney and CPA.
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I had the opportunity to discuss this issue with Manny Martinez, financial advisor to Brian Klemmer--he said, until you're making at least 100k annually, there's not a lot of point (in establish an entity, corp, llc, or otherwise, unless you're in a business where people get sued a lot, in that case, llc). Thoughts on this?
Hey Kate,
Yes, I've heard that... but I've heard the opposite, too.
We typically don't have much in the way of liability, but still, good to be protected.
But Loral Langemeier (and the CPA I use - I believe it's the one she uses) compares working under your own SSN to trying to fill a bucket that's got a hole in it. Having an entity in place is like plugging the hole.
What I did was work under my SSN until I earned enough to pay for getting an LLC. This way, it wasn't a barrier to getting started - but it also stopped the leak before it got too big.
My CPA before I switched to Taryle and Assoc. said not to bother getting an LLC... because I was unlikely to make enough to ever justify it.
"Thanks for the vote of confidence - you're fired!" : )
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