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01-20-2020, 10:47 AM #1
- Join Date
- Jan 2019
- Posts
- 140
dumb question of the day
ive been working for a iso shop for a while now and im looking to start my own shop. to start off, do i need to open a corporation in order to sign up with funders and receive commission or can i use personal information (w9 and a vc from my personal account)
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01-20-2020, 04:41 PM #2
- Join Date
- Feb 2017
- Posts
- 3,416
Let's put it back onto you - Why are you thinking that you should NOT incorporate?
While I'm not an accountant, I do know that if you're opening up a "shop" and you get paid to your personal account and then you want to pay an employee, you'll have to pay 15.3% social security taxes on all of your income before deductions, and you won't be able to deduct it as a business expense.
At the very least, to deduct business expenses, you would need to make a sole prop with a DBA. Then, almost all funders are going to require a bank account to match the name on the W9 which could then technically be your personal account.
Taken together, you don't have to incorporate, per say, but since you will need a bank account that matches your W9 the best way, which will be a sole prop/DBA at the least due your desire to deduct business expenses and keep good track of it, so then you should open a business account just to keep everything straight and easy. Go with Axos Bank, they're broker friendly.
Of course, you could also open an LLC (no difference tax-wise sole prop vs LLC, my accountant herself is a sole prop), an S Corp / LLC being taxed as an S Corp (my preferred method - it reduces the SS tax burdens), or a straight C Corp, but for those you should speak to your accountant and whatever bigger over-arching strategy you may have.
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01-28-2020, 11:47 PM #3
- Join Date
- Aug 2017
- Posts
- 405
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