Reptile & Amphibian Forums

I was curious weather it would be in my best interest to incorporate my venture. I figure this would allow me the opportunity to write off quite a bit. I average about $1500 in sales a year. But figured if I was able to write off all the expenses, Such as electrical bills, food, shipping expenses, advertizeing, internet connection, smart phone, and space in the home. It make work out to my benefit. Just looking for opinions as to what others have done. I breed mostly western hognose, but knowing that this is a fairly active forum, I would get a decent amount of knowledgeable reponses.
Thanks
Mark

I was thinking about doing the same thing for tax write offs.
An LLC is pretty cheap to start.

I think my internet, phone usage (I do text with customers) website, tubs, racks etc...
and even some gas can be written off. I have driven to NY City to make a trade (I am in CT) and I drive 20 minutes to meet my rat supplier. It's not much, but it's still a write off.

Ok, let me ask the question this way; for those who have incorporated, have you found it to be financially beneficial?
thanks
Mark

If you have a business, you can write off your legitimate business expenses. This happens whether you operate as a sole propriatorship, an LLC, or a corporation. The benifit of having an LLC or a Corporation is that it limits your liability to your business assets. Basically, if you operate as a sole proprietorship and someone sues you, all of your assets (house, car, investments, etc) are fair game. If you are a corporation or LLC, only the business assets are considered.

A few other things to consider:
1)The IRS has specific criteria to determine if you are operating as a business or as a hobby, and the tax rules are significanly different depending on which category you fall into. Being incorporated will not automatically make the IRS consider you a business instead of a hobby.
2)Rules and requirements for Corporations and LLCs vary somewhat by state. Your best bet would be to sit down with an experienced TAX accountant (not a bookkeeper), Tax Attorney, or IRS Enrolled Agent in your state. They will be able to give you advice specific to your situation.

Thanks for the solid info, very helpful. Looks like the next step would be to consult one of the professionals mentioned above. I definitely appreciate the insight. I guess I was a bit naive in assuming that once I formed an LLC, the tax man would treat the venture as a business with all the write-offs/benefits.
Thanks,
Mark