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<p>[QUOTE=&quot;definer, post: 1862316, member: 39713&quot;]Tim,</p><p><br /></p><p>Take this for what it&#039;s worth - there has been a lot of good advice here, now I&#039;ll give you some from my perspective.</p><p><br /></p><p>I started my business 10 years ago this year and incorporated as an &quot;S&quot; corp which gives me slightly more liability protection than a sole proprietorship. I have a business checking and saving account and have a separate personal checking and savings account. Make very sure you do that as it provides a clean delineation between the person you are and the &quot;person&quot; the company is.</p><p><br /></p><p>Years ago, company owners would not give themselves a salary (or would give themselves a small one) and pay themselves in dividends that were taxed at a much lower tax rate. The IRS caught up to that and now the smart thing to do is to pay yourself a a fair salary and then distribute dividends when appropriate; however, since you are a sole proprietorship it will all be taxed at regular income tax rates based upon your tax bracket. As a &quot;S&quot; Corp, if I have other folks I pay a dividend to as shareholders then the lower tax rates apply.</p><p><br /></p><p>For my particular business, I have very few assets since the majority of the assets are &quot;inside my head&quot; (a couple of my ex-wives might talk about the &quot;depreciation of THAT asset, but...!). My assets are a couple of laptops and a couple of printers,&nbsp; but nearly everything else is &quot;consumed as used.&quot; </p><p><br /></p><p>My taxes are easily done, but I do pay a lady (a former IRS audit supervisory employee) about a $1000/yr to do my personal and business taxes and believe she would be worth it at twice that amount.</p><p><br /></p><p>My advice to you is to be scrupulous in keeping records your first year and err on the side of caution as if you&#039;re bunking with an IRS auditor. Then when tax time rolls around next year, find a good tax person and turn your documentation over to them and then ASK ABOUT 100,000 questions about what you can and can&#039;t deduct as business expenses. Some things you may be surprised about, somethings not.</p><p><br /></p><p>You should realize that you do need to do quarterly tax payments and, while they should be as accurate as you can make them, I wouldn&#039;t worry too much about the accuracy for this first year; just remember to make the payments. Also, please realize you will automatically have a self-employment tax of 15.03% to pay that counts as both you and the employer side of the taxes required for social security.</p><p><br /></p><p>Don&#039;t play games until you know the rules and then PLAY BY THE RULES.[/QUOTE]</p><p><br /></p>

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