Individual or Sole Proprietor

[Phillip Arnn]

I think that is what I will do. There is a verse in the Bible that says,"First plant your fields, then build your house."
Since insurance is my cash crop, I better sell some before I spend money I really don't have.
Wisdom in the counsel of many. thanks

Phil

 

[moonlightandmargaritas]

There is a verse in the Bible that says,"First plant your fields, then build your house."

Wise counsel indeed.

WWJS? What Would Jesus Sell?

 

[SportsNut]

WWJS? What Would Jesus Sell?

Nothing... Jesus was in production, not sales...

The Carpentry Dept.

 

[moonlightandmargaritas]

Nothing... Jesus was in production, not sales...

The Carpentry Dept.

Outstanding Nut, best chuckle of the day - thanks!

 

[arnguy]

As SportsNut pointed out, "trust fund taxes" are not discharged in bankruptcy. In my previous incarnation at the IRS we had an excellent tool to extract those taxes from taxpayers who thought that they were protecting themselves from personal liability by incorporating. That tool was, and is, the "100% Penalty." The Revenue Officer would pierce the corporate veil to determine who were the de facto officers of the corporation as opposed to the de jure officers and then proceed to assess the trust fund taxes, i.e., all of the withheld income taxes and one-half of the total FICA tax liability against these de facto officers. Thus, the trust funds liability becomes the personal liability of those persons. Some of these wiseguy taxpayers would set up their secretary or other low level employees as a corporate officers.

 

[VaDwayne]

I think most agents/brokers, especially newer ones, spend way too much valuable time sweating this stuff.

If you don't find enough new clients and first year commissions, it's all going to be moot anyway. You' be well organized with the correct business form, but you'll be broke. Keep the horse in front of the cart!

After getting to about $75K in net revenues, it makes sense to look at a sub-chapter s corp - as a tax play.

Until you get there though, don't worry about it. Use the energy and resources to build clients.

Moonlight,

You are 100% correct. I am a perfect example of that. I spent way too much money the first couple of months when I should have been prospecting and building up my income.
- - - - - - - - - - - - - - - - - -

Nothing... Jesus was in production, not sales...

The Carpentry Dept.

I think he was in production and sales. He was the best salesperson that ever lived. He answered questions with questions, like a lot of trainers teach today. He had to sell salvation to people who hated his guts and wanted to kill him, but he didn't give up. He kept pushing forward, talking to, and teaching people; just like we should do when we are down and out.

He taught people, and allowed them to think of the answer they were seeking for themselves, and used stories to make a point, just like we do.

He asked questions that he already knew the answer to, just like a good salesperson does.

I do know that if he was a car salesman he would sell Honda's because scripture says "they were of one Accord".

I'M SOLD

 

[Chazm]

Sorry to resurrect this but I have a question about be incorporated.

I've been at this for about 7 years now and i still file as just a sole proprietor. I think it may be time for me to have an S Corp. Does that mean I need to contact all my companies that pay me commissions and have them make the checks out to my company and not myself? Set up a biz checking acct..etc.?

And as I think SportsNut mentioned earlier, you should pay yourself a salary and the rest is just a dividend. Can I literally not take more than my salary each month and the rest has to go in to an account that I cant take until after the new year or something?

 

[DHK]

Why incorporate in the first place? Most people incorporate to protect their personal assets from lawsuits of the business enterprise... but as a licensed profession, we don't have that protection.

The only reasons I can think of to incorporate or form an LLC, are for tax purposes (and even then, it may be slim), hiring salaried agents that you pay, and for business continuation.

If you go down this route, you'll have to get a business entity license from your state DOI. Then contact all your contracted companies and get your business appointed to receive the income. And yes, you'll also need a separate business checking account.

Dividends may be dependent upon your fiscal year - which does not have to align with the calendar year. However, I'm not a legal or tax expert, nor do I do a lot of advising businesses in these matters.

----------

Here's the 2015 corporate tax tables. Hopefully your revenues are over $335,000 to have a chance of having some tax savings.

http://finsecurity.com/finsecurity/pdfs/compliance/2b5-10.pdf

I think the 39% is set up for the $100k - $335k bracket to ensure that individuals aren't trying to set up corporations for the sole purpose of saving money on federal taxes.

 

[Chazm]

Why incorporate in the first place? Most people incorporate to protect their personal assets from lawsuits of the business enterprise... but as a licensed profession, we don't have that protection.

The only reasons I can think of to incorporate or form an LLC, are for tax purposes (and even then, it may be slim), hiring salaried agents that you pay, and for business continuation.

If you go down this route, you'll have to get a business entity license from your state DOI. Then contact all your contracted companies and get your business appointed to receive the income. And yes, you'll also need a separate business checking account.

Dividends may be dependent upon your fiscal year - which does not have to align with the calendar year. However, I'm not a legal or tax expert, nor do I do a lot of advising businesses in these matters.

----------

Here's the 2015 corporate tax tables. Hopefully your revenues are over $335,000 to have a chance of having some tax savings.

http://finsecurity.com/finsecurity/pdfs/compliance/2b5-10.pdf

I think the 39% is set up for the $100k - $335k bracket to ensure that individuals aren't trying to set up corporations for the sole purpose of saving money on federal taxes.

According to what I've been reading, you would only pay half the Social security/medicare taxes than if you were a sole proprietor. With a SP you have to pay your portion and the owners portion. And like where SportsNut mentioned on page one i think, you can pay yourself a salary and then the rest can be earned as dividends where you pay less taxes.