Dave

Run, do not walk, to your friendly favorite CPA.  Yeah, sometimes these guys 
can be expensive, but they are worth their weight in gold.

You probably want to formally set up a business.  This will involve a lawyer 
(even more expensive than the CPA).  Depending on your goals and tax 
situation, there may be value in setting up the business as a separate tax 
entity (i.e. C Corp).  You need to understand your goals, which your CPA can 
help you with.  Once you have that in hand, and an understanding of your tax 
situation, then you can figure out what sort of entity to form.  There are 
several choices, and each has plusses and minuses.

Without a business you might not be able to consider all the possible tax 
benefits, and many of those you might take are more likely to draw an audit 
if you are operating as yourself.  You need to consider not only federal 
taxes but state taxes.  I'm not sure, but I think Oregon is nasty.

Before I formed my corp I had to turn down a $100K gig because after 
expenses and taxes I couldn't break even.  As a corp, my taxes are a lot 
less and I can deduct all the expenses, instead of some.  That was in MI and 
I was in a nasty tax bracket. YMMV.  See your accountant.

Oh yeah.  Get yourself an accountant, too.  Oh, I said that.  Well, do it 
anyway.

--McD

----- Original Message ----- 
From: "dave" <betterthanalemur@yahoo.com>
To: <piclist@mit.edu>
Sent: Wednesday, August 10, 2005 2:35 PM
Subject: [OT] Tax Tips?


>I have just started doing consulting (or
> contracting at widlar would have it) on the side,
> and I was wondering if anyone had any tips for
> dealing with taxes.  Right now I am living in
> Oregon.  I am keeping all my receipts for
> everything and I am planning to jsut set aside a
> third of my consulting income in a seperate bank
> account for taxes (I already have a seperate set
> of bank acounts for all the consulting $).
> Should I set aside more/less?  Should I wait til
> christmas time to get a new O-Scope?  Do I get to
> write off my apartment as a place of business?
> Do I need to get a small business liscence or
> something?  I just graduated college and I don't
> know anything about this consulting stuff outside
> of the people giing me money to make stuff for
> them part...
>
>
>
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