Self Inc. Filing

[kylebes1]

I am now considered "contract labor" by my boss.

Several of the small business owners I know have suggested that I Incorporate myself. However, friends that are in the "contract labor" position have told me I can do the same thing with itemization and a "self-employment" status. I have an accountant in mind, but I do not want to bother her until I have all my shit together this time next year.

My fiscal year will be Jan 1, 2006- December 31, 2006 (My 20th birthday! :D).

Today's project involves filing. I have a new cabnet in my office and some hanging files. I am going to raid my old bosses files to get an idea of what is important, I used to help with theirs.

These are the files I have so far:

Red files are money spent files (Accounts Payable?)-
~Gas/ mileage
~Business Expense
~Reciepts
~Verizon Wireless
Blue files are money in files (Accounts Recievable?)-
~Taxible Income
~
Green files are Personal files-
~Auto, Health and Life Insurance Contracts
~Any Medical files Ex. Xrays, blood test, just shit I need to keep, may not be releavent
~Wachovia - Business Account
~MACO - Personal Account
Yellow files are Credit Cards
~What's in your wallet?
~

Just looking for suggestions on how to get started. I would like to wait until next year to do with incorporation as it costs a few hundred dollars.

[nkell09]

For now you can just report as a sole proprietor for income tax purposes. No real paperwork is required, as you'll report on your individual tax return.

If it is you making up the business, you have no real need to go through the process for incorporation. Unfortunately as a sole proprietor you do have full responsibility for any loans you take out and vice-versa. Sure, Incorporation gives your greater protection for the creditors. But the corp. will get taxed on its income, and then you'll get taxed on any withdrawals from the corp. (hence double-taxation).

If you do grow larger and have a need for more financing (and a bit more protection from creditors). You can look into setting up another business form (like an L.L.C.).

With that in mind, you'll report your Income and Itemized deductions on Schedule C. The business form of TurboTax can take care of this for you, but you may want to consider seeking some advice for your first filing. Just depends on the fees your looking at.

As for your records, you probably want to look at a basic bookkeeping package and some training for it. You can save a few bucks if you learn to do it yourself and have the time. At the company I work for, the clients we serve (mainly small businesses) use Quickbooks.

Of course your accountant should be able to lead you in the right direction. In short, hopefully this helps a bit... Best of luck!!!!