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8:14 am
August 18, 2011
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MoneyIsTheRoot
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I know quite awhile back we had a thread discussing the advantages and disadvantages of incorporating our blogs. However, I want to get a little more specific and a little more feedback.
I'm interested in incorporating my blog, and I want to write an article about it as well. I live in Michigan and would incorporate here, it is very inexpensive and can be done online. I have a decent amount of assets that I would like protected, and I forsee my blog pulling in $500+ a month for now…perhaps it will grow even more and perhaps it won't, we'll just have to see.
Here is what I'd like to ask all of you:
- Do you think incorporating is worth it? Some argue the expense of filing taxes, but I think using turbotax and doing it myself wont add any costs to my annual filings. I should be able to deduct internet, home office, etc, which would allow me to recoup quite a bit in expenses as well. Due to my salary and tax bracket, I think that incorporating would be beneficial from a tax perspective…though obviously my blog isn't a huge money making venture at the moment.
-How many of you incorporate?
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8:58 am
August 18, 2011
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JT_McGee
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Post edited 9:03 am – August 18, 2011 by JT_McGee
LLC here. Worth it, inexpensive, and gives a lot of legitimacy. It's a piece of cake and my state requires only bi-annual filings, so it's not like there's a ton of additional paperwork that goes with it.
The tax deduction for home offices I'm not familiar with. However, you can already deduct home office as a sole proprietor, so don't go out of your way just for that.
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10:02 am
August 18, 2011
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MoneyIsTheRoot
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Thanks for the feedback JT!
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10:33 am
August 18, 2011
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Melissa (Mom's Plans)
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I am in the process of doing it now. I talked to a local accountant who said it was a waste of time, but then I went to Savvy Blogging Summit where the benefits became very clear. Now I am working with someone on getting this done. Most people think a lawsuit isn't possible, but one of the deal bloggers at Savvy Blogging said she mentioned a deal at a national department store, and the department store shut her blog down and sued her. It was eventually settled, and her blog was up and running again after 4 days, but still. . .
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11:40 am
August 18, 2011
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MoneyIsTheRoot
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Melissa (Mom's Plans) said:
I am in the process of doing it now. I talked to a local accountant who said it was a waste of time, but then I went to Savvy Blogging Summit where the benefits became very clear. Now I am working with someone on getting this done. Most people think a lawsuit isn't possible, but one of the deal bloggers at Savvy Blogging said she mentioned a deal at a national department store, and the department store shut her blog down and sued her. It was eventually settled, and her blog was up and running again after 4 days, but still. . .
What type of person/company are you working on it with? Did you find someone online? Im wondering if it's something easy enough I can do on my own, or if it's worth the money to pay one of these online companies to do.
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11:48 am
August 18, 2011
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Khaleef @ KNS Financial
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I'm set up as an LLC in order to provide extra protection for my business – but I also prepare taxes and provide financial consulting. It wasn't that much work to get set up, and depending on how you set up, you can just complete a Schedule C when filing your personal taxes.
I think it's worth it, especially if you plan to grow your business and offer other products/services.
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11:50 am
August 18, 2011
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Khaleef @ KNS Financial
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MoneyIsTheRoot said:
Melissa (Mom's Plans) said:
I am in the process of doing it now. I talked to a local accountant who said it was a waste of time, but then I went to Savvy Blogging Summit where the benefits became very clear. Now I am working with someone on getting this done. Most people think a lawsuit isn't possible, but one of the deal bloggers at Savvy Blogging said she mentioned a deal at a national department store, and the department store shut her blog down and sued her. It was eventually settled, and her blog was up and running again after 4 days, but still. . .
What type of person/company are you working on it with? Did you find someone online? Im wondering if it's something easy enough I can do on my own, or if it's worth the money to pay one of these online companies to do.
I did it on my own, and I didn't have any experience. The IRS made it extremely easy to get an EIN (you apply online and get it immediately), and my state (New Jersey) had a ton of information online. I just simply followed the instructions, and I only had to make one phone call (to find out how to classify my business)!
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12:13 pm
August 18, 2011
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Eric J. Nisall
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It really isn't to difficult to incorporate (in any format). I didn't incorporate mine simply because I made it as a part of my business, which is already incorporated, so no sense in having double the annual fees, paperwork, etc.
As far as who to ask, I wouldn't ask an accountant unless you are concerned with the tax ramifications. Lawyers are the ones to go to in terms of protecting assets, as that is the legal side of the equation.
Regarding a home office, it doesn't really matter for the incorporation issue and that is handled on your personal return. I would not try to take that unless you have a room that is 1000% off limits to anyone other than people associated with the business. That is one of the things that the IRS looks at 2nd most when it comes to audits (Schedule C filers being the most looked at). Plus, when you sell the home you have to deal with depreciation recapture and it can be a hassle later on. You can always just seperate out the business portion from your housing payment, utilities, phone, internet service, etc and apportion them that way, and there is less exposure when you go that route.
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12:25 pm
August 18, 2011
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Suba @ Wealth Informatics
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Post edited 9:19 pm – August 22, 2011 by Suba @ Wealth Informatics
I have not taken the plunge yet (due to personal immigration reasons, nothing to do with the llc itself). But I did all the research on this hoping to do this around Sept/Oct.
There really is no reason to not have an LLC, unless the annual fee is too much like in CA. As a single owner, you will get treated as a sole proprietor for tax purposes (you can file your schedule C along with your personal income tax, no need for any corporate taxes…) and you get the benefits of having some protection against law suits and people coming after your personal assets. So it is the best of both worlds. In CA when I looked, the cost for DIY filing was ~$100. You can try the online legal services like Nolo, there are others like legalzoom and rocketlawyer but I like nolo the best. With these services it would cost (other than the state filing fee) $100-$400 based on how much help you need.
If you don't want to have an llc for some reason, you can still take all your home office (I would say taking the home office deduction for blogging would be really negligible as you have to do all the % exclusive use), internet, utilities and what not. So do the LLC for your own protection not for tax benefits. There won't be any extra tax benefits until you start earning a substantial amount. That is what I found out anyway…
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1:07 pm
August 18, 2011
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Tony Chou @ Investorz' Blog
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$500 a month??? Incredible. DO you sell intext links, sponsored reviews, banners, or what?
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2:31 pm
August 18, 2011
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MoneyIsTheRoot
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Tony Chou @ Investorz' Blog said:
$500 a month??? Incredible. DO you sell intext links, sponsored reviews, banners, or what?
I do all the above…I actually replied with a little more detail to your other thread you started. Most of the other members are a bit more established than myself and they are the ones who are bringing in truly impressive amounts of money.
If you are looking for advice on monetizing then Jacob, JT, Khaleef, Crystal,Derek, etc. are the resources for that one.
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3:17 pm
August 18, 2011
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Sustainable PF
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MoneyIsTheRoot said:
Tony Chou @ Investorz' Blog said:
$500 a month??? Incredible. DO you sell intext links, sponsored reviews, banners, or what?
I do all the above…I actually replied with a little more detail to your other thread you started. Most of the other members are a bit more established than myself and they are the ones who are bringing in truly impressive amounts of money.
If you are looking for advice on monetizing then Jacob, JT, Khaleef, Crystal,Derek, etc. are the resources for that one.
Guys like TFG and Tom Drake (Canadian Finance Blog) in addition to Daniel @ Sweating the Big Stuff really know their stuff too.
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7:13 pm
August 18, 2011
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Glen Craig
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If you are looking to incorporate make sure you understand everything that is involved. In NY, for example, the incorporating part is relatively inexpensive but you have to publish the LLC in two publications…I want to say for 2 weeks (haven't looked at the rules in a bit). The publication portion is what gets expensive.
This isn't the case in every state, just sayin' you have to know the details.
That said, I'm considering an LLC. Just stalling on dishing out the dough for it.
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5:09 am
August 19, 2011
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Mike – Saving Money Today
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I just formed an LLC myself to house all of my websites, still in the process of updating all my accounts and everything to reflect the change. I went with an LLC because it offers a certain amount of protection and it also looks more professional.
There are plenty of do it yourself options like Legalzoom but I had our lawyer do it. I'd rather pay a little more to have an expert make sure everything is done right.
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5:35 am
August 19, 2011
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Forest Parks
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I'm going to need to so the British equiv of this soon, I don't like paperwork :(
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6:45 am
August 19, 2011
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MoneyIsTheRoot
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Doesn't legalzoom do it a lot of it for you? I have looked at the annual costs, and it's pennies here in Michigan. Certainly well worth it to protect my assets, even if my blog was only a hobby I think it's the smart thing to do. As most have said, the tax implication is small…but I cant imagine losing my house/stocks/money/lawsuits from my blog…and i guess u never know.
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7:08 am
August 19, 2011
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Frugal Confessions
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Wow–what did they sue her for and why?
__________________________________
Melissa (Mom's Plans) said:
I am in the process of doing it now. I talked to a local accountant who said it was a waste of time, but then I went to Savvy Blogging Summit where the benefits became very clear. Now I am working with someone on getting this done. Most people think a lawsuit isn't possible, but one of the deal bloggers at Savvy Blogging said she mentioned a deal at a national department store, and the department store shut her blog down and sued her. It was eventually settled, and her blog was up and running again after 4 days, but still. . .
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8:20 am
August 19, 2011
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Miss T @ Prairie Eco-Thrifter
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There are different rules here in Canada so I can't comment a lot on incorporating in the US, but I am all for protecting yourself and your business.
Congrats on the great income. Please share your secrets…lol.
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8:31 am
August 19, 2011
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The Penny Hoarder
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I've started to look into as well. I like the idea of being protected and I'd also like to finally open a business checking account. I like how Crystal pays herself a salary out of her business account every month instead of wondering how much income there will be in a given month. :)
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10:43 am
August 19, 2011
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TightFistedMiser
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I haven't established an LLC but in my state it is easy to do. You just have to fill out a simple one-page form. The fees are cheap here too. The biggest cost for me would be having to pay a registered agent which is part of the reason I haven't set one up yet. Since I'll make five figures from my blog this year I really should set up an LLC.
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