ie: if you're making $100/mo (talk to your tax advisor), but if you're clearly making $3k+/mo then you should have a plan to incorporate, file taxes, etc. (and should also be talking to your tax advisor).
It helps to cool my jets when my brain gets into "unicorn mode" ... do I have 30 people RIGHT NOW who will pay me $100/mo? Am I supporting 3 customers who are each paying me $1000/mo? Are 300 people beating down my door to pay me $10/mo?
...probably not... and if they were? Then you've got the beginnings of a company and should start with the paperwork!
If you're working with a business that wants to be writing checks to a business, then it sounds like you need to have your own business?
...but consider that you have ~$5k/yr "off the table" of your own business expenses, and I'd still stand by the suggestion that you'd want to have a clear revenue or expense plan that gets you to at least the minimum bar of $14.6k (ie: where $5k is 30% of your proposed income) before you get too excited about filing business paperwork.
However, we thought that starting a company would motivate us because we would be "commited" and this would demonstrate to each other that we were serious about it, given that we all had other jobs. And to this day, I still think it has some meaning.
I'm glad Slidepicker handled it. I use it almost every day / I love that it hosts not only the presentations but also the images I drag-and-drop straight from my desktop.
Once you have incorporated as a company the company has to fill tax returns and possibly accounts. Even if you don't have customers, incorporating allows to file business expenses and to carry losses forward (mileage may vary by jurisdiction).
Well sure :) but we expected to pay a "normal" fine, not $60,000 right away. Especially since we had zero revenue. Today we would do many things differently...
> "Hey, the federal portal says we owe $60,000 in penalties for not filing a tax return."
That doesn't sound like they're asking you to pay tax on your $0 income business. It sounds like you need to pay a fine for not filing a tax return.
What's a "normal" fine anyway? The point of having a fine being a large sum of money is to create incentive so you to do the thing they want you doing, which you didn't do.
You don't say why you incorporated in the US... Much cheaper to incorportate in the UK, it seems (especially if you include fines and wind down, from what you wrote). I believe that filing tax returns (and accounts) is pretty much an universal requirement, as mentioned, anyway.
I've heard rumors/suggestions that you shouldn't worry too much about things until you have a clear revenue or expense plan that reaches the IRS minimums: https://www.irs.gov/individuals/check-if-you-need-to-file-a-...
ie: if you're making $100/mo (talk to your tax advisor), but if you're clearly making $3k+/mo then you should have a plan to incorporate, file taxes, etc. (and should also be talking to your tax advisor).
It helps to cool my jets when my brain gets into "unicorn mode" ... do I have 30 people RIGHT NOW who will pay me $100/mo? Am I supporting 3 customers who are each paying me $1000/mo? Are 300 people beating down my door to pay me $10/mo?
...probably not... and if they were? Then you've got the beginnings of a company and should start with the paperwork!
How does that work if your customers want to get a proper invoice?
https://www.invoicesimple.com/invoice-generator (?)
Talk to your tax advisor? https://www.google.com/search?q=business+bank+account+requir... ?
If you're working with a business that wants to be writing checks to a business, then it sounds like you need to have your own business?
...but consider that you have ~$5k/yr "off the table" of your own business expenses, and I'd still stand by the suggestion that you'd want to have a clear revenue or expense plan that gets you to at least the minimum bar of $14.6k (ie: where $5k is 30% of your proposed income) before you get too excited about filing business paperwork.
I agree, and I think we knew that even back then!
However, we thought that starting a company would motivate us because we would be "commited" and this would demonstrate to each other that we were serious about it, given that we all had other jobs. And to this day, I still think it has some meaning.
I'm glad Slidepicker handled it. I use it almost every day / I love that it hosts not only the presentations but also the images I drag-and-drop straight from my desktop.
Did you incorporate as a C corp or LLC?
C corp in Delaware
Go with S-corp.
what is the difference?
Once you have incorporated as a company the company has to fill tax returns and possibly accounts. Even if you don't have customers, incorporating allows to file business expenses and to carry losses forward (mileage may vary by jurisdiction).
Well sure :) but we expected to pay a "normal" fine, not $60,000 right away. Especially since we had zero revenue. Today we would do many things differently...
Let's say you wouldn't have been able to reduce the fine to $1,500, could you just have closed the company to avoid paying the fine?
In your post you say:
> "Hey, the federal portal says we owe $60,000 in penalties for not filing a tax return."
That doesn't sound like they're asking you to pay tax on your $0 income business. It sounds like you need to pay a fine for not filing a tax return.
What's a "normal" fine anyway? The point of having a fine being a large sum of money is to create incentive so you to do the thing they want you doing, which you didn't do.
You don't say why you incorporated in the US... Much cheaper to incorportate in the UK, it seems (especially if you include fines and wind down, from what you wrote). I believe that filing tax returns (and accounts) is pretty much an universal requirement, as mentioned, anyway.
Our target market was US, so US company was the first and only choice.