Hi, I started Screen Printing and vinyl about a year ago as a side job. I decided to start small and work out of my garage. I chose to go with a sole proprietorship because it seemed simple and cheap. Business has since picked up and kept me too busy since I am a teacher as well. I found a small building to work out of and also display apparel. I plan to train and hire some help. Should I stick with a sole proprietorship or change my business type? Can someone give advise for my situation in general. Thanks.
What type of business?
[SELLING PRINTING SERVICES]
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I am only familiar with how the tax on business works in Canada. Sole proprietor business you will have to pay income tax on any profit you make on top of the income from your full-time job. So if you claim $25k a year on the business, you have to pay tax on that + your full time job. Ends up being a lot if you are making good money and claiming everything. If your partner with someone,. you will have to pay tax on the profit of percentage of the business profit you have set-up. 50/50 or whatever. If you create and incorporation you only pay taxes on the salary you pay yourself. Unless you are using dividends which is a lower tax rate than income tax. The corporation will not pay any income tax until there is (I think) 500K profit. Again this is what I know here in Canada. Hope that helps
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I wrote this a while back. Hope it helps. http://www.t-shirtforums.com/t-shirt-articles/t17054.html
We have a C-Corp. It is the only form of company that allows you to have unlimited cash and non cash non taxable benefits. Other forms do have ways to have benefits but the C-Corp is the most flexible. It can retain earnings, have a fiscal year different from a calendar year and can operate as if it were a person.
We have a C-Corp. It is the only form of company that allows you to have unlimited cash and non cash non taxable benefits. Other forms do have ways to have benefits but the C-Corp is the most flexible. It can retain earnings, have a fiscal year different from a calendar year and can operate as if it were a person.
Joined
·
9,955 Posts
I wrote this a while back. Hope it helps. http://www.t-shirtforums.com/t-shirt-articles/t17054.html
We have a C-Corp. It is the only form of company that allows you to have unlimited cash and non cash non taxable benefits. Other forms do have ways to have benefits but the C-Corp is the most flexible. It can retain earnings, have a fiscal year different from a calendar year and can operate as if it were a person.
We have a C-Corp. It is the only form of company that allows you to have unlimited cash and non cash non taxable benefits. Other forms do have ways to have benefits but the C-Corp is the most flexible. It can retain earnings, have a fiscal year different from a calendar year and can operate as if it were a person.
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