[nabentre] setting up a partnership or LLC

[slery]

Thanks, Michael. I'll be emailing you off-list.

Cindy

> -----Original Message-----
> From: nabentre-bounces at nfbnet.org 
> [mailto:nabentre-bounces at nfbnet.org] On Behalf Of Michael Baldwin
> Sent: Friday, May 15, 2009 10:07 AM
> To: 'NFBnet NAB Entrepreneurs Mailing List'
> Subject: Re: [nabentre] setting up a partnership or LLC
> 
> 
> Yes it is possible, but you might not want to do it that way. 
>  If you're an employee, the partnership will need to pay 
> Federal and state unemployment on you.  The partnership will 
> be responsible for half of your social security and Medicare 
> withholding, and you the other half, which isn't a big deal, 
> cause you will pay the same amount as self employment tax if 
> you are self employed.  There is just more work involved in 
> depositing the withholding, social security, and Medicare 
> taxes to the IRS.  Then your state withholding, if you have 
> state income tax, will be made according to your states regulations.
> 
> As a partner in the partnership, you will also receive a form 
> at the end of the year with your share of the partnerships 
> income, and you will need to claim that as income.  So, in 
> reality it will cost more, and be more work if you go with a 
> partnership, LLC, Corp, or S Corp.
> 
> When your self employed, the SSA, from the way I understand 
> it, gets a projected P&L statement from you for the year, and 
> base what they pay you off that, then at the end of the year, 
> you send them what your actual P&L for the year was, and they 
> adjust it accordingly.  So it would not be a month to month 
> fluctuation, just a year to year.
> 
> This example might not be your exact situation, but it should 
> give you an idea. Let say you gross $3000 a month $36000 a 
> year from your business. Your social security and Medicare 
> will be $5508, 15.3% of your income. Federal tax at $5400, 
> 15%, this will depend on your tax bracket. $1800 for your 
> state tax 5%, again depends on your state and tax bracket. 
> That brings you to $23292 before any business expenses.  That 
> is 1941 each month. You would only need a little over $300 a 
> month in other expenses to get this down below $1600 a month, 
> or whatever the cut off is for SSDI now.
> 
> Of course this is just an example, you will need to sit down 
> and do some projections on your income and expenses.  If you 
> want help, you can e-mail me privately,  I have been a 
> bookkeeper for about 8 years.
> 
> 
> 
> 
> 
> 
> Michael Baldwin
> Got print, need Braille?
> http://www.ReadWithDots.com
> 
> -----Original Message-----
> From: nabentre-bounces at nfbnet.org 
> [mailto:nabentre-bounces at nfbnet.org] On Behalf Of slery
> Sent: Friday, May 15, 2009 6:32 AM
> To: 'NFBnet NAB Entrepreneurs Mailing List'
> Subject: [nabentre] setting up a partnership or LLC
> 
> Is it possible to set up a partnership with a family member 
> that would then allow me to be an employee and have the 
> company pay me a check?
> 
> My concern is that as a sole proprietor my income will vary 
> each month and I do not want lose my SSDI totally. If have a 
> job that pays me $2000 one month, and then the next month a 
> few jobs that only net $1500, it would be really hard to pay 
> my bills and cover a medical policy.
> 
> I'm trying to make sure that I line everything up properly 
> before I plunge ahead.
> 
> TIA,
> Cindy
> 
> 
> 
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