TRANSCRIPT:

Hi Greg Vojtanek here of Fade In Financial. Today I’m going to talk about four Pros and three Cons of incorporating yourself.

Let’s start with the three Cons. Number one, you now have to file a separate business tax return in addition to your personal, or individual, tax return.

Number two, you may have to pay additional local and/or state taxes. I know here in California there’s a minimum of $800 per year that you must pay as a business.

And number three, you now have to have some bookkeeping. Whether you do that yourself or hire an outside service, you have to do some bookkeeping now for your business.

Now the four Pros to incorporating yourself. Number one, based on the screenwriters and directors that I have worked with in the past, that said bookkeeping is not too complicated or time-consuming.

Number two, you now have more control over your own salary. This isn’t to be confused with avoiding taxes or doing anything improper. But you do have more control over your own salary.

Number three, now again, with all of this, check with a tax professional. But you may be able to deduct additional things such as streaming services or your cable bill as business expenses.

And lastly, if you make too much money to contribute to a Traditional IRA or a Roth IRA, which many of you screenwriters and directors will fall into, you can bypass those rules and limits by opening up your own account through your corporation.

So that’s certainly not all the Pros and Cons to incorporating yourself. Those are just four Pros, three Cons. But I do hope you found this helpful. And, as always, do what’s right for you. Thanks for watching.