Death, Taxes and Incorporation

Jesse Angelo

OK here's the deal...

We are getting closer to the end of the year and that means tax time is just around the corner. I started my own VO business this past spring, I did recieve an EIN but am just not sure how to go about with the IRS.

Other than the cost of my equipment do I have any other deductions I can take? Should I consider incorporating at some point and, if so, when?

I would just like a few ideas or personal experiences to help me make sure I'm doing everything on the up-and-up.

Thanks,

Jesse

Connie Terwilliger · Posted: Fri Nov 03, 2006, 04:16 (GMT) Post subject:

If you are receiving 1099 income for your work and filing a Schedule C, then there are lots of business deductions you can discuss with your tax accountant. I am not a tax person and work with mine every year to determine my deductions, but here are a few ideas.

Education/Training
Office Supplies
Business Software
Marketing/Advertising (including the membership to V123)
Office in Home (provided it is clearly for your business only)
Your high speed line for sending files
Your editing software
Recording media (CD's) and labels and boxes
Postage
Telephones/Voice Mail systems (you need to be able to be reached by your clients/agents.)

Connie Terwilliger
www.voiceover-talent.com

DB Cooper · Posted: Fri Nov 03, 2006, 05:34 (GMT) Post subject:

I can't emphasize enough the need for an excellent accountant who understands the disparate ways people like us receive their income.

You can also include your mileage for travel to auditions and jobs.
—also computer hardware direstly associated with your studio.

Keep all your receipts.

Nikki Saco

Here's the IRS URL for Home Office Deductions: http://www.irs.gov/newsroom/article/0,,id=163079,00.html It's a good place to start. Meeting with an accountant is the best idea. It's not just about paying only the tax that's fair, but protecting yourself against fines if you don't, and of course tax laws change from time to time.

The main reason I might incorporate in Florida is because I understand it may offer some protection of my personal assets from exposure to liability. I've been thinking about this for months myself. Although voice over work may seem pretty low on the liability scale, it's not liability-proof. If we're writing copy, there could be claims of plagiarism. If we mix music, we need to make sure it's royalty free or we face claims of copyright infringement. If we narrate proprietary information for clients and sign non-disclosure agreements, we need to respect that; and certainly any time we sign a contract, there's the potential for perceived breaches of its provisions.

Meeting with a good local business attorney is the best thing you can do to find answers, and I mean really local, because cities and counties have their own particulars about maintaining businesses in their areas (home or outside the home). I'll be meeting both an accountant and a local attorney in the next couple weeks to get my answers. There are some business attorneys who are also CPA's. That's a cost-saving combination if you can find one.

I was a trial paralegal for a long time and really want to urge you to get legal advice exclusively from a qualified attorney. The unlicensed practice of law doesn't help anyone. It's illegal in my state so you can see why my post is really cautious. Although you may want to go the cheapest route possible, I would urge you to avoid paralegal clinics unless they show you they're operating under the supervision of a qualified attorney who will review any work done for you before it's completed. It's one thing to provide you with information sites and urge you to talk to an attorney (like I'm doing here), but if anyone other than a lawyer is telling you you don't need to incorporate or reviewing contracts for you, that person isn't doing you any favors, and you're not doing that person any favors by asking.

There are certain web sites I really like when I need information. FindLaw.Com is one of them. It's a good source for laypeople, lawyers and paralegals. The site includes a "Find A Lawyer" link at http://lawyers.findlaw.com/; and, if you're paying by the hour rather than a flat fee to set up your business, you can make the most of your time with the attorney by getting a little more informed beforehand. To do that, you may want to review Findlaw's content on starting a small business: http://smallbusiness.findlaw.com/

If anything, this forum is a good place for all of us to develop a checklist of questions for our attorneys and accountants.

Louis Tristan · Posted: Sat Nov 04, 2006, 02:16 (GMT) Post subject: 1099

Nikki is right! Go with the legal advice. Make sure they are real.