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Up Topic Welding Industry / General Welding Discussion / D.B.A.
- - By Rafter_G_Weldin (***) Date 11-13-2012 04:46
How do yall have your business set up im getting on with a outfit that requires a DBA and insurance i found the insurance just need some help witht a DBA im thinking of putting all of it in my wifes name and just paying myself 400 a week for tax purposes. After my illness in 2008 ill never see a tax return anyway still cant figure out how 300,000 in hospital bills gets turned over to the United states department of treasurey
Parent - By Cumminsguy71 (*****) Date 11-13-2012 11:54
It gets turned over because the government can do whatever it needs to in order to get the money. I have a friend who's wife had a double lung transplant years ago. She got a little better then things went bad and she passed away. He owed over $180,000 in the lung work alone. He told me, there is no way I can pay that back on what I make in a year.

I've got mine set up as a dba as well, Shawn Kelly, dba(doing business as) KLB Welding Service. That's how it is listed on all my important things, insurance and other. If you do the business give your wife 51%, you keep 49%. My brother in law had his company set up like this. This would be considered a woman owned small business, a minority owned business. When it comes to bids you'll get a little leg up. I thought about doing it this way but being a disabled vet I've got more pull than my wife would have!! Around here though a Vet owned business in local and state work don't mean doodoo. On Federal projects though. Check with your state and see but in Tennessee the minority/woman owned business is considered on local and state projects.
Parent - By OBEWAN (***) Date 11-13-2012 14:16
DBA laws vary depending on which state you live in.

In Florida it costs $50 to register a DBA business name but the registration is good for 5 years.  It can be done on the Internet or by mail.  But, once you are registered you go into some kind of tracking database and will be buried with new business owner junk mail offers and you will be added to the tax registers for your town if they tax business owners.  That might mean being taxed on all the equipment owned by the business but for Jacksonville, the lowest rate is a self employed freelancer business for $45 a year.

Getting set up to pay yourself if a bit tougher.  I think there are legal loopholes like getting a lawyer involved and setting up an LLC corporation.  The taxes become more complicated but with the right legal situation for some states it may be possible to pay for your own unemployment taxes and then have the ability to collect layoff benefits...but I am not certain.

I tried to set up a DBA at the beginning of this year but I decided that I was not ready to launch yet and I wanted to avoid paying the city taxes for DBA owners so I withdrew my registration.  The withdrawl costs another $50 so I wasted $100.

Google for your city and state to see if they have any info online.  It might help to use the term "ficticious business name" in the search besides DBA.
Parent - - By Cactusthewelder (*****) Date 11-13-2012 15:08
Shad,
In Texas, a DBA does not protect you from anything. You are better off to file an "S" Corp. Then you are protected personally. A DBA is simply having a Bank Account in a Name other than your own. The Governement can still Tap into it if they want to. An "S" Corp protects you because the Corporation is it's own entity. It is not personal. A DBA works off of your SS#. A Corp works off of an EIN number which seperates your Compnay Property from Personal Property and it also seperates liability. You can also build Credit under a Corporation that is seperate from Personal credit. Call me and we can talk about it.
Parent - - By OBEWAN (***) Date 11-13-2012 16:50
Now I am confused.  I just checked with the state of Florida and at their website they say that a minimum of 75 shareholders are necessary to form an S corp.

Is Texas different or is there a way to incorporate with no shareholders?

There is also the C corp but I think it has a max limit on shareholders.

The only reason I would choose a corp over a 1099 business would be to find a way to get access to unemployment benefits for time periods between contracts.

I have been a W2 contract worker for 3 years now and I always get to collect layoff benefits between contracts even if I go in knowing that it is only a 12 week contract.

The way I look at it, it is my money and I worked for it and I earned it.  It is not much different than having money put in the bank to carry you until the next project.
Parent - - By Cactusthewelder (*****) Date 11-13-2012 22:16
I own 6 "S" Corps. About to be 8 of them. I have my Lawyer set them up. I have been an "S" Corp for over 12 years. My Wife and I are the ONLY Share Holders and my Attorney is the Agent Of Record.
Parent - - By welderbrent (*****) Date 11-18-2012 22:02
I only own the one, Arc-Tech Welding, Inc.  And I am the only share holder in the S-Corp.  I am also the Agent of Record. 

S Corps have a lot of latitude, at least in AZ and appearently TX. 

Biggest thing to make sure you don't forget is your annual business meeting and records to stay current with the Corporation Commission on your annual filings.  If you are not careful the courts will pierce the corporate veil calling you a fraud using the corporate status to cover illegal activities and/or avoid taxes. 

I also am covered by $2mil Liability Insurance, Workers Comp, Vehicle On-Site Insur, which covers me for about anything I want to do on site either as a welder or inspector.

I have seen some inspectors getting into a little trouble lately because they are not insured (nor certified) to operate scissors lifts, boom lifts, or any other equipment while on job sites.  But they jump onto some other company's rented scissor lift to look at welds.  Many job specs actually specify that inspectors must have an operator use the lift, all they do is inspect.  That can change if you rent your own on bigger jobs.  But if you are not properly qualified and insured you need to be very careful.  Now, you can get insurance without being an S-Corp, but there are other protections that are better handled with an S-Corp.  If you want to protect your personal property you need the corporate protection.  Limited Liability Corporations live up to their name...LIMITED LIABILITY.  NO Corp is absolutely that...NO protection. 

Just my two tin pennies worth.

Have a Great Day,  Brent
Parent - By Cactusthewelder (*****) Date 11-18-2012 22:28
Brent, Well said and you are EXACTLY Right !
Parent - - By Rafter_G_Weldin (***) Date 11-19-2012 01:28
I have looked into insurance and can get 1mill for 370 down and 70 and change for 10 months 1022 a year
Parent - - By welderbrent (*****) Date 11-19-2012 18:26
I wish I could get mine that cheap.  With all the projects our shop does and having employees it costs me more than that.  Insurance has a rating system based upon the type of business/work you do, annual sales, and payroll.  I have projects that won't consider anything under $2mill.  And the total that sticks in my mind also includes my Workers Comp and On-Site Auto,  one policy for all my needs.  Keeps the paperwork down, especially when you have to send all of those to a customer. 

Then, most customers need you to have them listed as 'Additionally Insured'.  That costs $25 everytime my agent has to add one and send it to them and me for our records.

Have a Great Day,  Brent
Parent - By Dualie (***) Date 11-20-2012 07:27 Edited 11-20-2012 07:30
Im in the same boat, with the shop and scope of work CNA was the best rate i could get.   I think they are trying to go both feet in on the fabrication/welding market.    I had Scottsdale before and CNA cut my payments in 1/2 and its a one stop shop for everything from the vehicles, property, workers comp and 3 million general liability.

when writing proposals i always make sure to exclude any costs of added bond premiums, additional insurance, or licenses.   covers the costs of adding additional insured and having to buy local business licenses for different projects in the 150+ towns within my working area some of which can be $250+
Parent - By Cumminsguy71 (*****) Date 11-14-2012 12:58
I never use my SSN#, I have an EIN# and a D.U.N.S number and whenever they ask for anything they get those. I guard the SSN with my life. Your right about the legal standpoint though. Something happens and they're coming for everything I own as a sole proprietor. Look into LLC, S-Corps and that and find out how much it costs(Lawyer) and whatever else.

Check amazon for books, they've got plenty out there that explain the details behind LLC, S-corps. According to the book I have the requirements for an S-Corps are these,

- Domestic corporation with one class of stock
- No more than 35 shareholders who are citizens or legal residents of the U.S.
- All shareholders must consent to S Corporation status
- Use of a permitted tax year
- Filing of IRS Form 2553

"If your business is an eligible domestic corporation you can avoid double federal taxation(paying taxes to the corporation and again to the shareholders) by electing to be treated as an S corporation under the rules of Subchapter S of the Internal Revenue Code. In this way, the S corporation passes items of income, loss, deduction, and credits through to its shareholders to be included on their separate returns."
Parent - By Rafter_G_Weldin (***) Date 11-17-2012 05:59
I'll call you as soon as i get a chance been fixing pump jacks all week and have my Emmas first borthday party tomorrow Thanks
Parent - By Rafter_G_Weldin (***) Date 11-18-2012 19:02
Ive done some research on it and it sounds good i just dont undertsnad the shareholders part guess i need to find a good smart cpa that understands the welding side of life
Parent - - By hillbilly delux (***) Date 11-13-2012 16:31
Shad,

   Cactus has a good point. But before you jump off onto a flat rate game and pay for an umbrella and start supplying consumables and waiting every thirty days for a check.  Really do the math to make sure its worth it.  Me personally I would rather work a split check than work straight contract. Less headache.  When I was playing that game I was S corp.
Parent - By Rafter_G_Weldin (***) Date 11-17-2012 05:52
Hillbilly thev pay with them sucks but itll get me thru the winter when all else fails.I'm still not sure i wanna work for them but money is money these days. I'm not sure they are ready for a welder of my calibur i have seen the work of the guys they have. S corp is sounding good to me
Parent - By Rafter_G_Weldin (***) Date 11-19-2012 01:29
And ill get a check every 2 weeks if they go to 30 days im out
Parent - By strother (***) Date 11-14-2012 00:36
I have my business set up as S Corp with one share holder. In my opinion DBA only works in your advantage if you are doing a lot of work for cash. With DBA you have to pay Social Security and Medicare on all of your profits. With an S Corp you only pay Social Security and Medicare on the amount you take as salary. You can take the the rest of the profit in dividends or leave it in the business. You will still pay Income tax on the dividends but at least you will save on the SS and Medicare.
Parent - By Rafter_G_Weldin (***) Date 11-29-2012 17:16
Thank you all for all of your input I am going to go with a DBA for now cause its all i can afford but am going to go with the scorp once i get the funds built up
- By texwelder (***) Date 11-13-2012 13:19
Gotta love that government huh but just think that welfare broodmare has had five or more kids and ain't paid for the first one I wonder if the government is afterher I would bet not our government would kick a horse while it's down
- - By TozziWelding (**) Date 11-13-2012 21:54
I live in a peoples republik hell hole(Massachusetts), and I am John R Tozzi DBA Tozzi Welding, just set it up with my bank and use my SS for taxes as I am a sole proprietor. I may go LLC soon but that is going to cost me money, we shal see. As a DBA I am protected from nothing, as an LLC I can get protection and put my wife as President and be a minority contractor, they love those up here.
Parent - - By Tommyjoking (****) Date 11-14-2012 00:52
Shad,

I operate as a sole proprietor a.k.a   a  DBA.  What Cactus and Shawn told you is what it really is...it is just a fancier way to track you taxes really.

I was thinking LLC myself just because the paperwork is less and I can still make draws as the owner instead of real paychecks.  I am going to sit down with a biz/tax lawyer before I commit tho.  I got to change over just to get a dang contractors license here...at least the audit will be cheap since I am starting fresh.

What I want to get figured out is how to keep capital in the biz at the end of the year without it being taxed as profit....is there no such thing as operating capital that is just "there"?
Parent - By Cactusthewelder (*****) Date 11-14-2012 14:36
Most of you guys over think all of this stuff. Just invest in a Tax Attorney and let them handle it. That way, if there is a problem, It's THEIR Fault and THEIR Liability. You need to do the same thing that a GC does to all of us. Put the liability on someone else ! It is money WELL Spent.
- - By weld4JC (*) Date 11-14-2012 17:08
how does Obamacare affect you if you are set up as a"S" CORP. in texas. Is Obama care required for Texas small business
Parent - By OBEWAN (***) Date 11-14-2012 17:58 Edited 03-19-2014 22:29
I am shopping for insurance right now and there are HUGE discounts given to businesses and group plans compared to individual policies.  If you can get access to a group insurance plan as a business owner you will be way ahead.  And there are also freelancer associations that can be joined without being a business owner that might give access to group heath insurance.  And there will be new tax deductions, so if it does not cause rates to go up drastically, I think I will be ahead of the game myself.

I plan to buy a group plan through AARP.  They quoted me $179 per month for a $3K deductible with no upper limit.  The reason it is so cheap is there are a lot of exclusions.  It is about 1/2 the co-pay that I have dished out for group plans at former employers - including policies that were a "benefit"
Parent - - By Cumminsguy71 (*****) Date 11-14-2012 19:00
As an individual business owner you'll have to have insurance of some sort or they'll fine....I mean, TAX you a certain amount the first year. Seems as though the second year it doubles if you are still uninsured. If you own a business I believe they said you'll only be affected if you have over 50 employee's, meaning you'll have to provide a healthcare plan. Guys with 3, 5 employees from my understanding will not. That would fall onto the employee themselves I believe. Another reason to stray away from the employee thing for a few weeks or months along with the fact that my business insurance is going up for no reason other than the sun rose this morning.
Parent - By Oneatatime (**) Date 11-16-2012 02:43
All of my insurance doubled overnight, no notices, until i got cancellation letters for lack of payment, since it was set up on auto pay....
Needless to say i am in the transition of changing insurance companies. Need to go sign the final paper work tomorrow.
Parent - By TozziWelding (**) Date 11-14-2012 22:22
I am FUCT anyway, we have had Romneycare up here for 10 years.
Up Topic Welding Industry / General Welding Discussion / D.B.A.

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