Dave, I suggest that you go to your local bookstore and look at some "starting a business" books, especially if they are targeted to your state. You can incorporate (S-corp), perhaps a LLC, or maybe a sole proprietor. Each form of business has its advantages and disadvantages - the books should help you sort it out. After reading up and then setting up the business with the help of an attorney, find yourself a CPA to setup the accounting. Some CPAs want to handle everything, others will let you fill out the monthly and quarterly tax stuff. You will need to decide between paying him to do it all or just some of it. You will be totally amazed at the taxes you will be paying. You will be filing quarterly Federal and probably State taxes, as well as monthly sales taxes (if applicable). You will also need to remit the employers social security taxes, your personal federal and social security taxes, unemployment insurance for yourself (no kidding) and workers compensation tax. Probably a few others I'm not thinking about. The CPA will guide you in this and how to minimize the bite. For example, he will probably tell you to take "draws" from the business, then later in the year he will figure out what should be salary and what should be dividends (capital gains are taxed at a lower rate and are not subject to social security and all the other little obnoxious taxes). The above is based on my experience with an S-Corp, the other forms maybe slightly different. Capital equipment can be purchased at any time during the year - don't wait until December if you really need it. The general idea for tax purposes is to make the company barely break even so it doesn't pay taxes. Buying equipment helps - you can either write your scope off this year or depreciate it over 5 years as I recall (there are $ limits to the immediate write-off). Forget writing off the apartment, it will be too much hassle as well as the room must not be dual use space. Other issues - you will most likely need a business license for your county or city. You need to setup state and federal taxes for your business, including an EIN number. You need to setup sales tax as well, and educate yourself if it will need to be collected and at what percentage (depending on where the product is sold). As far as setting aside 1/3, it may or may not be enough, depending on the total amount collected. Ask the CPA. The list just goes on and on and on!!! Disclaimer: Don't trust anything I've said as I may not be remembering everything correctly. Get an attorney and a CPA to advise you. Good luck. Ken klumia@adelphia.net ----- Original Message ----- From: "dave" To: 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... > > > > ____________________________________________________ > Start your day with Yahoo! - make it your home page > http://www.yahoo.com/r/hs > > -- > http://www.piclist.com PIC/SX FAQ & list archive > View/change your membership options at > http://mailman.mit.edu/mailman/listinfo/piclist > -- http://www.piclist.com PIC/SX FAQ & list archive View/change your membership options at http://mailman.mit.edu/mailman/listinfo/piclist