If you are talking about a U.S. corporation, get a good accountant. Any good local CPA will be a wizard at this. You don't need to go to a fancy office with a staff of 20 and pay fancy prices. Just get someone who has been doing this for years.
When you incorporate, things get complicated. For example, do the stocks you put into your business become part of the business? If not, are you a services business? How do you pay yourself? Where do you store the profits? Do those become part of the business? If you withdraw the profits from the business and give them to yourself, does that count as being paid? If so, does that mean that money is taxed at a normal wage-earner rate? When you make a profit, are you paying the tax or the corporation? If the corporation is paying the capital gains tax, does that mean the capital (i.e.) the shares are now part of the corporation?
It gets tricky. It's not worth messing around with. The laws change all the time. The accountant is up-to-date with the laws because they do this stuff all day long and know what to pay attention to.
So I would say work with a professional. If an athlete can make $20 million kicking a football, an accountant can make a professional wage working every day to help people do things correctly. Accountants are some of the best money well spent on the planet.
I would do this:
1) Find an accountant you like and whose fees you find affordable.
2) Talk to the accountant and have them tell you what type of corporation you should set up (if any). They know how each corporation works because they do corporation financials all the time.
3) Once you know which business structure to set up, go to a local licensed attorney and have him/her write the proper paperwork. It's a one-time cost, and you want to get it right.
4) Then bring the corporate structure paperwork to your accountant. Your accountant will know exactly what's going on. From that point forward, you don't need the attorney. You work with the accountant.
When you incorporate, things get complicated. For example, do the stocks you put into your business become part of the business? If not, are you a services business? How do you pay yourself? Where do you store the profits? Do those become part of the business? If you withdraw the profits from the business and give them to yourself, does that count as being paid? If so, does that mean that money is taxed at a normal wage-earner rate? When you make a profit, are you paying the tax or the corporation? If the corporation is paying the capital gains tax, does that mean the capital (i.e.) the shares are now part of the corporation?
It gets tricky. It's not worth messing around with. The laws change all the time. The accountant is up-to-date with the laws because they do this stuff all day long and know what to pay attention to.
So I would say work with a professional. If an athlete can make $20 million kicking a football, an accountant can make a professional wage working every day to help people do things correctly. Accountants are some of the best money well spent on the planet.
I would do this:
1) Find an accountant you like and whose fees you find affordable.
2) Talk to the accountant and have them tell you what type of corporation you should set up (if any). They know how each corporation works because they do corporation financials all the time.
3) Once you know which business structure to set up, go to a local licensed attorney and have him/her write the proper paperwork. It's a one-time cost, and you want to get it right.
4) Then bring the corporate structure paperwork to your accountant. Your accountant will know exactly what's going on. From that point forward, you don't need the attorney. You work with the accountant.
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