I am an associate at a couple of different offices and hired as an independent contractor. I am also looking to purchase my own at some point within next couple of years. I would like to set up my own Corp for tax advantages. I have a good accountant that will help me with that but wanted to know if there is a book or articles that you would recommend to give me some background info on incorporating yourself and business more tailored towards dentistry for my own knowledge that would teach me all the tricks.
What tax advantages do you expect to get from incorporation and how do the additional tax savings compare to the costs associated with
A. Creating the corporation
B. Annual tax preparation for the corporation
C. Payroll processing for you from the corporation
D. Additional unemployment taxes because you’re a corporation
I am a corporation and I can tell you that it is an accounting nightmare. It is very complex stuff. I am a subchapter S which does have the tax advantage of lower tax rate on dividends/bonuses. Everyone says you need to do it for liability protection. I am not sure that I would recommend it. Most people are doing it now. Accountants and lawyers love them because that is what they get paid to do.
Not all of us love them. Although it’s true that we make more money as I mentioned above since someone has to prepare the tax return, handle some bookkeeping, payroll, etc. That is exactly why I raised the issues that I raised.
It is not a slam dunk for everyone and more times than not it won’t make sense for the typical IC.