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Is It Wise To Incorporate To Make Money On The Internet

Aug 9, 2008
You can understand why this question is often asked since self-employed individuals are hit with a self-employed tax of about 15 percent on top of regular income tax and, these taxpayers already pay higher rates than corporate tax rates.

And by the above statement, most would believe that incorporating would make sense to save on taxes alone. Yet looking deeper you'll find that you're not saving money in most cases at all.

A corporate tax is a tax on corporate profits, not on an individual tax. Money that you take out of the corporation in the form of dividends or salary will be taxed on your personal income tax return. This alone is not beneficial.

So what is it that you really want to get out of incorporation? In regards to blogging and freelancing as an individual, incorporation may not save you tax dollars. Is there something other than this you are looking for that might be of help?

Many corporations will take you more seriously when you are incorporated because this gives you more credibility. For example, certain large business firms will not even issue a 1099 tax form for an individual; they only hire incorporated entities.

As a bona fide corporation (two or more employees constitute a group) you may be entitled to receive a corporate rate with most insurance companies. Health insurance is very necessary and very expensive today. This is a big plus in today's world.

Protecting personal assets from liability is an increasingly important issue for bloggers. Most corporations allow for some protection from liability so long as you follow corporate formalities. This protection can aid in some kinds of judgments.

Don't be fooled, incorporating doesn't mean that you can promote or write anything that you want to escape liability. Keep things in perspective. Evaluate the many positive reasons why you should incorporate your business.

The main aspects may be to help you and other employees make more money with the Internet, the ability to have liability protection, increase your credibility, enhance your health insurance rates, and to be able to announce that you have a career not a hobby.

Now is the time to consider your long term plans. Your current tax situation for the future can't be made on a blog post along. It would be to your advantage to thoroughly discuss all of this information with a professional prior to making permanent decisions.

A conversation with your legal or tax professional would be wise to gain insight and understanding by conducting a lawful study.
About the Author
Court is a make money internet expert and also provides internet marketing services.
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