phee

iTrader: (5)

I have been doing freelance audio production/engineering and Video shooting/editing work for 5 years now and i am finally at the point where i am doing work for larger companies. In the past most of my work was with direct customers who paid cash or check, usually small amounts under 1k so it went under the table.

These companies all request invoices and send 1099's at the end of the year that i will have to pay taxes for.

I am trying to minimize my taxes for the neext year so i am looking into business licenses, are they worth it or should i just pay the 1099 taxes?

My thinking tells me that having my business income and my personal income seperate will decrease my taxes because the money isn't getting added to my salary and getting taxed in a higher bracket.
-i also think having write-offs for new equipment (i plan to purchase a new computer, tripod, mic, speakers early next year) will be beneficial
- deducting milage, i always travel to the clients not the other way around.

Should i do it? can i write all this off WITHOUT a license?

fuzzy02CLS

iTrader: (2)

I set up a LLC for my sound engineering work I do. This way it's a separate entity from my personal life.

Ken1997TL

You can do it without a license, including write-offs.

LLC is the way to go since you separate your business's LIABILITY from your personal finances.

phee

iTrader: (5)

so the LLC is what will enable me to file taxes seperately? can you elaborate a bit more ken and fuzz?

Dr. Colorado

+1. I set up a LLC for my practice. This is primarily for liability/medicolegal advantages as Ken alluded to. Then I created an S-corp and put myself on the corporation's payroll so I wouldn't be FICA taxed on my practice's net income. I can also deduct my health insurance. I leased a BMW through the company and keep a mileage log with business related travel (i.e. going to bank, pharmaceutical dinner or office supply store). Remember, you can only deduct mileage from your primary place of employment to whatever work related destination you are going, not from home (unless you work from home).

Phee, you might consider getting a CPA's opinion.

phee

iTrader: (5)

thanks fellas. it's all confusing but I want to take the proper steps to protect myself and my income.