To inc or not to inc

Speaking not as a published person, but as a sole proprietor of an editing business (ie, I sit in my office and write and edit), my accountant told me that it wasn't necessary in my state and in my position (ie, without employees), doing what I do and making not a lot of money. I might suggest that it might be worth a call to whoever does your taxes (if anybody does) to see what's best in your state or for your particular position.

Or someone else might be able to offer actual advice.

Inc

azbikergirl said:

To those of you who've published: have you incorporated yourself? If so, what are the benefits and drawbacks as you see them? If not, is it something you just didn't consider, or did you decide against it (and why)?

TIA!

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I looked into it a few years ago, and couldn't find any advantages at all. It seemed many times more trouble than it was worth.

I don't know anyone who's incorporated, but my co-author and I have a formal partnership. Still, all income comes to us directly and we just expense things through the partnership so it works nice on our taxes.


I do know several writers with large incomes that have set up irrevocable trusts, however. The copyright is in the name of the trust, and the author takes a salary for life. Then, after death, an administrator handles doling out future royalties to family, etc. It seems a nice solution, but we're not quite up to that level yet.

I've done the sole proprietor thing. It's not necessary to incorporate. Once you inc, your taxes would be so much more complicated. I'd say keep it simple for as long as you can, at least until your business grows so much...

I'm a sole proprietor for my writing. My husband and I have a partnership for our other business.

Incorporating yourself means becoming a corporation, which gives you less control over the business and income. As someone else said, it also makes the whole taxation process more complicated.

Sole proprietor also makes you 100% responsible for everything, tax-wise and legality-wise. If you're incorporated, the most they can ever do is go to the corporation itself.

Just the flip side of the coin.

Another sole proprietor here.

Beth