Have You/Will You Incorporate Your Blog | Bloggers Lair | Yakezie Forums

My LLC has owned my blog since day one. The tax benefits of running a small business are great.

Im in Michigan…I incorporated about 6 months into blogging… it was beneficial during tax time, and not expensive nor difficult in my state to incorporate.  Not to mention the liability shifts to the LLC, though some would argue otherwise.

20s Finances said:

Does anyone know of or have any of you written a post on the tax benefits of forming an LLC? This thread has me curious now…

i know a few yakezie wrote about it awhile back…. I believe JT @ Money Mamba maybe? Speaking of which I havent seen him around in quite some time, hope all is well.

I haven't yet, but plan on it. Not just for my blog but for all of my online endeavours. Just put it under one big umbrella.

Club Thrifty said:

Does anybody know the answer to this: Assuming that I form an LLC, could my internet service at my house be written off as a business expense? Would service have to be billed by the provider in the LLC's name?

My understanding of tax law is that you can only write off the percentage of an expense that actually applies to the business. A more common example is a home office. If you have a room in your house used EXCLUSIVELY for business purposes and that room comprises 5% of the total square footage of the house, then you can write off as a business expense 5% of your mortgage/rent.

While theoretically possible, I doubt the lRS would be sympathetic to the claim with internet service.

Best article I can find on the topic (and a great read):

http://www.smartbloggerz.com/2…..to-an-llc/

Edward Antrobus said:

I haven't yet, but plan on it. Not just for my blog but for all of my online endeavours. Just put it under one big umbrella.

Club Thrifty said:

Does anybody know the answer to this: Assuming that I form an LLC, could my internet service at my house be written off as a business expense? Would service have to be billed by the provider in the LLC's name?

My understanding of tax law is that you can only write off the percentage of an expense that actually applies to the business. A more common example is a home office. If you have a room in your house used EXCLUSIVELY for business purposes and that room comprises 5% of the total square footage of the house, then you can write off as a business expense 5% of your mortgage/rent.

While theoretically possible, I doubt the lRS would be sympathetic to the claim with internet service.

Internet service is right there as well! Not to mention any and all utility payments.  Just as you stated the percentage of square footage, the same applies to all of your bills.  Now, I wouldnt buy new windows for the house and then write that off, but then again, the office does have two windows in it… so im curious, maybe im missing out on something like that and it can be claimed…id luv to hear from a tax expert here that would know?

Interesting thread! I'll likely confirm with an accountant before I sent anything in, but while I'm not going to try to deduct my mortgage payments or anything like that, my internet usage is primarily related to business, as are my cell phone expenses. In the end these items are not big huge-writeoffs, but it does help out. I get the most savings from paying myself less salary, since payroll taxes are 30% at anything higher than minimum wage, while business tax is 19%.

Post edited 9:22 am – August 8, 2012 by Club Thrifty

BTW – I think this is the link SeeDebtRun was meaning to post. His wasn't working when I tried it out.

http://bit.ly/bDfSTH

Please correct me if I'm wrong on that.

MoneyIsTheRoot said:

Invest It Wisely said:

Interesting thread! I'll likely confirm with an accountant before I sent anything in, but while I'm not going to try to deduct my mortgage payments or anything like that, my internet usage is primarily related to business, as are my cell phone expenses. In the end these items are not big huge-writeoffs, but it does help out. I get the most savings from paying myself less salary, since payroll taxes are 30% at anything higher than minimum wage, while business tax is 19%.

While odds are that you already deduct your mortgage interest expense at tax time on a personal level…if the office is inside your home, writing off that expense again would be double dipping, even if it is just a portion.

 

I am curious how you pay yourself less?  I used turbo tax last year, and it calculates tax on earnings one way only…unless im missing something.

I live in Canada so we're not allowed to deduct mortgage expense from our taxes; in fact, there's something called a Smith Manoeuvre in which people borrow against their equity and invest it, so that the interest does become tax deductible.

Right now what I do is transfer some money from one account to another, and determine how much of that is salary (some of it is just pure transfer, because I've paid for some business expenses with my personal money). I then calculate the payroll taxes using an online calculator which I've found to be accurate, and keep track of the liabilities using GnuCash. I had to pay my first payroll this month, and let me tell you, paying 30% after a few months of salary really hurts. :S I also have yearly payroll and stuff that isn't included with the online calculator, and that even the government-supplied calculator doesn't calculate… it's all one big PITA.

Using GnuCash can also get involved as they don't have a very good GUI, but I tried Quicken and didn't like it at all. I do love GnuCash for the easy and simple double accounting, in spite of the bad GUI.