Wait a minute…you’re not a business owner?
You operate like a brand, don’t you (that is, you’re a one-person PR machine)?
You tweet about events that are relevant to your life and shell out after-tax dollars to host a website, buy the computer you blog with, and dip into checking to pay for your broadband connection…right?
Here’s how to invest the next 27 minutes by forming an LLC that will save you money and provide a much needed tax boost to all you social media commandos:
LegalZoom It
First, a disclosure. I have absolutely no side deals with LegalZoom so I could care less if you actually form an LLC with them — this is just some free advice meant to help you save a few bucks and build a business.
The main reason for starting an LLC, or Limited Liability Corporation, is to protect your assets against claims when you decide to start a business. But they’re also fantastic sources of tax savings, because corporations don’t pay taxes like you or I do — not by a long shot.
Let’s say you want to buy a nice new laptop, which you are presumably going to use to share Tweets, create blog posts, and communicate over the web…these are business expenses at any corporation, so long as you have designs on generating revenue in some small way.
You won’t pay with after-tax dollars, either. Corporations — even teeny tiny LLC’s — don’t pay any tax until they’ve “spent down”. Let me break it down this way: At the end of the year, you add up all the money you made as a business, then subtract your expenses, and this is what you pay taxes on.
In contrast, individuals pay taxes on all the money they make, period.
3 Steps, 27 Minutes, and Infinite Business Possibilities
When you form an LLC through LegalZoom you ditch the lawyers hourly fee and become incorporated quickly — in 27 minutes or less. Sign up for a business credit card and bank account by checking the appropriate boxes along the way (if this makes sense for you). Once you’ve got the paperwork in the mail you can start a media empire dedicated to making you money with as little tax exposure as possible.
This means you can save more cash to put towards equipment, web development, and profit (money in your pocket). Instead of starting a blog with your hard earned money, I recommend forming an LLC, then start as many blogs and websites as you like under the umbrella of a protected business (and keep receipts so you don’t pay the tax man for business related activities!).
The bottom line is that more social media people should treat their passion like a well structured business so they can keep the doors open. You may just find this side-business LLC becomes a profitable socially networked business.
Resources:
LegalZoom LLC in 3 Simple Steps
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