A business owner wants to know how to file personal income taxes.

Speaker 1: Brain, welcome to the Law Show.

Brian: Hello.

Speaker 1: Welcome.

Brain: Hello.

Speaker 1: Hello.

Brain: Hello, can you hear me?

Speaker 1: Yeah, we can hear you, you can hear us?

Brain: Yes, I can.

Speaker 1: All right, you got a question for John and Richard, what can I do for you?

Brain: Yes, I do. What – what I’ve got now, I have got my own business and I’m also employed full time recently with an electrical company. And I’m wondering how I should be going about firing my taxes.

Speaker 1: So, are you making money in the business?

Brain: In my own business?

Speaker 1: Yeah.

Brain: Yes, I involved, yes.

Speaker 1: All right. So, just probably a lot of different ways to approach in there, John?

John: Yeah. Brain, we have to look at your entity structure too. You – you definitely have to file a return for your business, are you incorporated?

Brain: No, I’m not.

John: No, than you would file what’s called the Schedule C to report your business income and expenses. And then you would just report your W2 wages on your normal 1040.

Speaker 1: Richard, what do you think about somebody who is in business and doesn’t set up the corporation if though – I’m assuming Brian, you’re an electrician right?

Brian: I’m in furniture, right now.

Speaker 1: Is that what your business is doing?

Brian: I do electrical plumbing and carpentry on my own.

Speaker 1: Okay, so what do you think about that kind of a business, should they be incorporated, are they taking too many risks for the exposure, Richard?

Richard: Oh yeah, absolutely Brian. The advantage to incorporation as you defend yourself against law suits. A person – if somehow your business hurts somebody, the person can only sue the business, not you as an individual. You can protect your house that way, you can protect your assets, your cars, things like that, whereas, if you limit your exposure by setting up a corporation, the person can only sue the corporation and the assets of the corporation.

Speaker 1: Now, I was going to ask you also John, there is a rule that you and I were talking about a new tax brake. If an employer hires a displaced employee, then there certain tax brakes need to discuss it…

John: Yeah.

Speaker 1: Brian a little bit, maybe he is going to have a bump up in the business here.

John: Yeah. Brain if you end up hiring some employees and they’ve out of work for more than 60 days, you can get a credit on your 941 payroll taxes where – because typically the employer has to match that 6.2 percent social security tax. But you can get a credit on that now if you hire a misplaced well, worker. And also what I want to mention to you too is, you have the option – if you’re in a small business you could set – just set up a limited liability company and elect as corporation status with the IRS that way you’re taxed as a corporation. I mean, there is a lot of option for it, it’s probably best for you to sit down with somebody and discuss it.

Speaker 1: Hey Brain, have you had a chance to sit down with somebody can advise you on how to set up business, how to run it?

Brain: What’s that?

Speaker 1: Have you had a chance to sit down with a professional to discuss about how to run your business and how to set it up, how to set up your books?

Brain: Not – no I really haven’t gone through all that – like I said, I – I know John, we’ve talked a little bit about it. So, I like I got to sit down and – I just recently got hired in at [Indiscernible] [0:02:56] company full time. So, it’s for like taken off now that I need to find out that information.

Speaker 1: So John, what do you charge to sit down with Brain and talked him about how to set this up?
John: First consultation will be absolutely free.

Speaker 1: How about you Richard?

Richard: First consultation is always free.

Speaker 1: Brain, you really, you really, you really not getting the full benefit of the Law Show here until you sit down and talk with us. This is not going to cost you anything maybe the gas to get to our office, okay?

Brain: Well, that’s sounds good and I’ll do that.

Speaker 1: Very good, thanks for calling Law Show.