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New Member
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May 20, 2008, 05:41 AM
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Starting Your Own Company
I am looking to become a consultant for my current company. They are located in NY and I live in Texas so I would like to become a consultant for them. They are open to it, so it is just a matter of me starting my own company... I'm assuming.
Does anybody know the steps or a site that would help me in getting this done and if you have an approximate of cost that would be helpful as well?
Thank you for all your help.
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Expert
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May 20, 2008, 06:13 AM
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Yes, work out a contract and walk out of office one day as employee, walk back in as a contractor the next. You would merely be self employed, the paymnent details will have to be worked out. Just remember they will not be withholding taxes out, so save back at least 30 percent of your income for taxes.
There is really nohting you have to do
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New Member
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May 20, 2008, 06:15 AM
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I don't have to start a business then? Do I pay taxes on a personal level or a business level>
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Uber Member
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May 20, 2008, 07:30 AM
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Hello T:
The Padre is right on, as usual.
YES, you have to start a business. However, that's as easy as simply declaring yourself to BE in business. THAT form of business is called a sole proprietorship. You don't need a name. You'll still pay taxes the same as before. Instead of filling in your income from your W-2. You'll fill in the income from your schedule "C". You'll get a 1099 form from your contractor detailing how much they paid you on their contract. THAT amount is the amount you fill in on your schedule "C" as your gross income... Then the expenses of your business are deducted from that.
It's all accounting stuff that you really don't have to worry about. I'd hire an accountant to get your books set up right. It'll probably cost you about $50 to do that. They'll also do ALL the tax stuff at the end of the year for you.
No, you don't need any other number from the IRS, and from what you've described, I doubt very seriously whether you need a local license. Your accountant will tell you that. But as long as you're not selling a product, you won't have to collect sales tax. That's all a local license does - allow you to collect tax for them.
So, instead of negotiating a salary, you'll have to negotiate a contract. It ain't really any different. Course, keep in mind that YOU are now going to paying ALL the expenses of fulfilling your contract - like office supplies, rent, transportation, communication, etc.
But, being in business for yourself is good. It's very, very good.
excon
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New Member
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May 20, 2008, 07:38 AM
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OK, the company might be willing to pay for my office supplies as a reimbursement because of special circumstances as to how I'm in Texas to begin with.
With that being said, all I'm responsible for at that point is my business taxes that I will have to pay from Schedule C. Yes, getting an accountant to do it for me will be much easier then me trying to figure it all out.
Do you think I can write off a portion of my electricity as a business expense under this circumstance?
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Uber Member
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May 20, 2008, 07:52 AM
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Hello again, T:
Again, your accountant will tell you...
However, if you dedicate a portion of your home to an office, and it's used for NOTHING else, then (from my humble NON-ACCOUNTANT point of view), you will be able to deduct whatever percentage of your home you dedicate, like actual square footage, (let's say 20% for example), from ALL your utilities, and a portion of the interest you pay on your home too - PLUS rent. I'd write a RENT check from your business to yourself every month.
excon
PS> (edited) In regards to you writing a check to yourself... I would start a separate checking account. Don't tell the bank it's a BUSINESS account because they'll charge you more for it. Yes, it'll be just a regular personal checking account in YOUR name. However, you can print ANY name you want on the checks. Certainly, if your business name is Tex Consultants, that's the name you can print on your checks. That way, you can keep your BUSINESS life separate from your personal. The IRS will like that arrangement, and your accountant will too.
That's all, Tex. Go kick some business butt!
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