Incorporate or Remain a Proprietorship
I just realized that I'm writing this on the seventh day,
of the seventh month, in the seventh year... 070707. On top
of that, my corporation is seven years old today.
Should you incorporate? It's a question that I get asked
nearly every week. There's an entire chapter on the
benefits of incorporating in Clickin' it Rich.
Download Clickin' it Rich
==> http://www.cdzn.com/fun
But if you don't feel like downloading it, and reading it,
let me ask you a simple question. Would you rather be in a
35% or a 17% tax bracket?
Or in other words, if you earned 100K per year, how much
would you rather pay in tax, 35K or 17K? It's a difference
of 18,000 dollars.
Your results will vary depending on where you live. But no
matter where you live, incorporating will save you a lot of
coin in the first year alone.
You'll need two professionals to pull this one off. Don't
try and do this yourself. Ask your friends, or consult the
local associations, to find a lawyer, and an accountant,
that specialize in small business.
Even if you're only making five thousand per month in
affiliate revenue. Incorporate right from the start. Keep
your finances and records clean, and separate from your
personal ones, and you'll never have to worry about them.
Incorporating a company costs about 500 dollars. Then the
filing fees and annual report costs, are about 500 per year
after that.
Don't worry if you don't know how to file a report, or have
annual meetings. That's what the lawyer does for you. All
you need to do, is sign two pieces of paper, once a year
and that's it. She does all the rest.
An accountant will cost about 1,000 dollars per year. For
that amount, she will work with the lawyer, to secure all
the necessary documents for your files. Do your yearly
taxes. And offer financial advice.
These two professionals will cost you, about 1,500 per
year. But they can save you 18,000 per year... remember?
How can they do that? By playing within the corporate
rules.
By paying yourself a low salary, and collecting the rest of
your income in dividends. You can also pay your spouse.
This 'income splitting" can pay for all the household
needs. You can also maximize your retirement funds.
The corporation can also deduct everything as an expense.
All the consumables like mobile phone air time, internet
access, training materials, and travel to seminars. All the
assets like computers, software and office furniture.
But don't even think about dividends, income splitting,
consumables or deductions. Your account and lawyer, look
after all these things for you.
So yes, I highly recommend that you incorporate. Don't even
concern yourself how to do it. Just go get an accountant.
Then get the lawyer. (Your accountant might even refer
one.) And start saving a lot more of your earnings.
Incorporating is one of the smartest things that you can
do. And one of the most profitable over the long term.
You'll save year after year.
For the sake of example, lets say my company is now seven
years old. Multiply those seven years by 18K per year in
savings. That's 126,000 dollars I've saved, by playing
within the corporate rules.
Your government has given you a rule book. Are you playing
the game to the max?
Get professionals on your team, and you'll be surprised,
how quickly things turn in your favor. And instead of just
playing the game, you start winning the game instead.
