>> monkers wrote:

>> >I was wondering if anyone could tell me how to go about starting a part
>> >time shop up? I would not be doing a lot of work, but would like to do
>> >this proper, and legal so as not to worry about the IRS or anything
>> >like that. Im a machinist full time but get request for machine work
>> >and welding on occassion. I know a lot of people say "just take cash"
>> >but that doesnt seem like the best solution.
>> >         What are the correct steps? I do not have an accountant yet,
>> >and I dont know anything about running a buisness. Any help would be
>> >great,

>> Hmm, so many questions!  I don't use any outside accountants, lawyers, etc.
>> anymore.  They just cost too much.  I did use a lawyer and an accountant to
>> set up everything, but have been winging it for about the past 18 years.

>> You may want to get a ficticious name registration to allow you to operate
>> under a company name.  Corporations are a LOT of paperwork hassle for
>> very little benefit to a one-man shop.  My lawyer told me that was a waste
>> of time, if you are really just one guy then a corporation gives no immunity
>> to suit, etc.

> There is at least one advantage to incorporating a one-man operation,
> and that is the ability to make profit distributions to shareholders
> (you being the sole shareholder) that are not subject to SS taxes. Of
> course you have to be making a profit to do this, and you can't get away
> with taking no wages and all distribution, but I've been advised that as
> long as the distribution is not more than 20-25% of wages the IRS is
> generally happy.

> To decide whether this makes sense you need to weigh the expected tax
> savings against the additional expense and hassle of maintaining a
> corporation. For me it amounts to a yearly filing with the Secretary of
> State that costs $65 and perhaps another $100 to my tax preparer for a
> somewhat more complicated tax return. I figure a distribution a bit over
> $1000 is my break-even point. I've heard the fees to maintain a
> corporation are considerably higher in some states, which would of
> course shift the balance.

> This is for an S corp, I can't imagine a situation where a C corp makes
> sense for a one-man shop.