Spoke to Joel Smith. He advised setting up a corporation. Coincidentally that's the route that generates the most accounting fees. He claims that the advantage is there are less ss fees. The rate is 15%. As a sole prop you pay 15% on your entire net income. As a corp. you can set aside a portion of income as wages and the balance as ? non-wages. You only pay ss on wages.

His example was 100M of income - 40M of expenses leaves 60M. A sp pays 9M of ss, but a corp could pay 30M of wages and 30M of non wages, saving 4500 of ss.

But that means you are putting 4500 less in your ss account, and retirement benefits will reduce. On the otherhand if you need the money to live, or can put it in an investment or IRA I guess you are better off.

But the cost of being a corp seems like a lot higher. It's about 700 to set it up, and another 1M per year in accounting fees (125 per quarter and 500 for the y/e). A sp only has to do the y/e return.

I have to pay taxes monthly on income and set up a corporate account.

Deductions? - He didn't provide any suggestions. When I asked he said I can deduct the car payments and insurance, the full amount of a family health care plan, and he would set up a small stipend for a home office.

His other benefit - corps are audited less than sp's.

Want to check with Ron and Jack on how they do it and how happy they are with their accountants. I really need to be led by the hand on this. And I don't want to pay much for it. Seems contradictory.

But 1M a year in accounting fees seems nuts for the kind of business I will do. I will give him all the data, he puts it into his software, and spits out a 1M bill? Maybe its reasonable, I don't know.

I don't want to screw up and either invite an audit, pay more taxes than I need to, or owe a penalty.

I'm not an idiot and I'm willing to invest in software if it pays off. I bet I can do a lot of it myself.

I need to come up with a corporate name. I can use the same corp. for an internet business as well. So either I come up with a generic name or just a serious one and then get a dba for the internet business. I don't want to deal with Durkin or whoever with some goofy name.