Have you thought about incorporating?

[Will-Casel]

Have any of you thought about incorporating?
Aren't there tax/legal advantages to your show becoming a business?

For instance, you can write-off some of your equipment purchases on your taxes. You can't lose your house if you get sued by the RIAA for playing that Britney Spears song. etc. Hey, maybe you can even apply for a small business loan!

I haven't taken a business class for a while, but I was just curious. Maybe someone more knowledgable on the subject could chime in.

Will

[AmericanCliche]

You may find that the benifits aren't worth it. I used to run an online radio station called 8BallRadio.com. We set it up as an LLC. However, it cost us nearly $500 to do the initial paperwork filing and depending on the state you set it up in, more per year as a "cost of doing business fee." In CA it was $800 a year we had to pay just to keep the LLC.

For me, I wouldn't get a tax benefit greater than $1300 for the first year that would be worth me setting this up.

Your mileage may vary...

-Scott

[SteveRunner]

Have any of you thought about incorporating?

Will:

I see where you're going with this, and certainly if someone has an interest in turning their PodCast into a business it's a great idea...but most of us out here (okay: I won't speak for anyone else) are doing this only as a hobby.

I know someone who has her own graphics art business (she's a contractor) and she flies to Europe several times a year and claims it as a business expense: when I've asked her how she justifies that morally, she says "I NEED to visit Europe to become inspired: I'm an artist".

She's full of crap is what she is. :)

[dangercast]

Have any of you thought about incorporating?
Aren't there tax/legal advantages to your show becoming a business?

For instance, you can write-off some of your equipment purchases on your taxes. You can't lose your house if you get sued by the RIAA for playing that Britney Spears song. etc. Hey, maybe you can even apply for a small business loan!

I haven't taken a business class for a while, but I was just curious. Maybe someone more knowledgable on the subject could chime in.

Will

Operate your podcast as a sole proprietorship. Just because you aren't incorporated doesn't mean that you can't offset your revenues against expenses. Depending on where you live, small business loans are available to anybody who has a good business model they want to explore. The fact that you are incorporated or not won't change much of that.

Oh and as per the Britney/RIAA thing, I wouldn't count on that being any sort of protection. Let's face it, as sole shareholder of your new corporation, you are the one mandating the company to do something illegal, etc. Moreover, prosecutors have no compunction against "piercing the corporate veil" when it comes to "one-man" corporations.

That being said, the whole "inc." thing would look cool on your letterhead, etc.

[guscave]

If you do your podcast out of a room in your house, I don't think you can claim equipment purchases as a deduction unless that room is used only for business. I had this problem when I started my recording studio until I moved to a warehouse space. I can now deduct everything and I didn't need to be incorporated.

You can write-off other expenses directly associated with your podcasting such as magazine subscriptions, web hosting fees, trips to conferences, but you need to show that you do it as a business and not a hobby. I think there's a minimum amount of hours you need to dedicate to it in order for it to be considered a business.

Grab a copy of TurboTax and it will give you some more details about it.

[gregleck]

If you do your podcast out of a room in your house, I don't think you can claim equipment purchases as a deduction unless that room is used only for business. I had this problem when I started my recording studio until I moved to a warehouse space. I can now deduct everything and I didn't need to be incorporated.

You can write-off other expenses directly associated with your podcasting such as magazine subscriptions, web hosting fees, trips to conferences, but you need to show that you do it as a business and not a hobby. I think there's a minimum amount of hours you need to dedicate to it in order for it to be considered a business.

Grab a copy of TurboTax and it will give you some more details about it.

Well indeed, everything depends on the country and the jurisdiction. Obviously tax rules aren't universal. That being said, it's easy enough to claim that a particular room in your house is being used primarily for business purposes. If you are operating from your house/apt., a percentage of house expenses can usually be deducted.

I understand your hobby vs. business statement, but the moment your enterprise generates revenue, it's very easy to make the statement that you are operating your podcast as a business and an ongoing concern. If you are in your first year of operation, you will undoubtedly be able to claim a loss -- which depending on where you live and the applicable tax laws -- are usually claimable as a loss carry forward during those years when you do make a profit. (Edit: I mean "against" those years you are actually making a profit.)

As for equipment, the cost of same usually has to be amortized. So if you buy a big *** computer, a microphone from Nasa and Led Zeppelin's old mixer, you will most likely have to amortize this deduction over several years.

[SFEley]

Have any of you thought about incorporating?
Aren't there tax/legal advantages to your show becoming a business?
Escape Pod has long considered (and is still considering, limited mostly by my free time) incorporating as a 501(c)(3) non-profit. This is an option available to us because our purpose is primarily literary, which is one of a few exempt activities. However, I haven't fully decided yet that it's worth the hassle. There are some fantastic tax advantages to being a non-profit, of course, but the paperwork requirements are enormous, and you're extremely limited in what you can do and how you can pay people.

If we don't go the 501(c)(3) route, we'll probably incorporate as an LLC. There are more people who work on the podcast than just me, and I do worry occasionally about liability. Not a lot, but we're a fiction publisher. It's easy to piss somebody off.


For instance, you can write-off some of your equipment purchases on your taxes.
FYI, you can do that as a hobby too -- but only to offset revenue. There are specific rules for deducting hobby expenses, including needing to show a profit at least three out of five years (or something like that). You can Google for more.

The upside of declaring income and expenses as a hobby is that the tax paperwork is extremely easy and you don't have to do anything special. In order to be able to deduct expenses as a business, you have to be able to prove to the IRS that you are going about the activity "in a businesslike fashion," which can mean many different things. The downside, of course, is that the tax benefits are limited and there's no liability protection.


You can't lose your house if you get sued by the RIAA for playing that Britney Spears song. etc.
You still could. The RIAA could name you as an individual on the suit, and request a lifting of the corporate veil. Since knowingly playing copyrighted music is a pretty dumb thing to do, they might even get it. (Maybe -- I'm not a lawyer, I just listen to the Nolo Press podcast.) >8->


Hey, maybe you can even apply for a small business loan!
For what? Banks will only lend your business money if you can show how you're going to use that money to make more money to pay back the loan. With a podcast, demonstrating that could be difficult, and I'm not sure what expenses really warrant it. It's a much better idea to keep your equipment and marketing within your means and stay debt-free.

[gregleck]

Have any of you thought about incorporating?
Aren't there tax/legal advantages to your show becoming a business?
Escape Pod has long considered (and is still considering, limited mostly by my free time) incorporating as a 501(c)(3) non-profit. This is an option available to us because our purpose is primarily literary, which is one of a few exempt activities. However, I haven't fully decided yet that it's worth the hassle. There are some fantastic tax advantages to being a non-profit, of course, but the paperwork requirements are enormous, and you're extremely limited in what you can do and how you can pay people.

If we don't go the 501(c)(3) route, we'll probably incorporate as an LLC. There are more people who work on the podcast than just me, and I do worry occasionally about liability. Not a lot, but we're a fiction publisher. It's easy to piss somebody off.


For instance, you can write-off some of your equipment purchases on your taxes.
FYI, you can do that as a hobby too -- but only to offset revenue. There are specific rules for deducting hobby expenses, including needing to show a profit at least three out of five years (or something like that). You can Google for more.

The upside of declaring income and expenses as a hobby is that the tax paperwork is extremely easy and you don't have to do anything special. In order to be able to deduct expenses as a business, you have to be able to prove to the IRS that you are going about the activity "in a businesslike fashion," which can mean many different things. The downside, of course, is that the tax benefits are limited and there's no liability protection.


You can't lose your house if you get sued by the RIAA for playing that Britney Spears song. etc.
You still could. The RIAA could name you as an individual on the suit, and request a lifting of the corporate veil. Since knowingly playing copyrighted music is a pretty dumb thing to do, they might even get it. (Maybe -- I'm not a lawyer, I just listen to the Nolo Press podcast.) >8->


Hey, maybe you can even apply for a small business loan!
For what? Banks will only lend your business money if you can show how you're going to use that money to make more money to pay back the loan. With a podcast, demonstrating that could be difficult, and I'm not sure what expenses really warrant it. It's a much better idea to keep your equipment and marketing within your means and stay debt-free.

Yep, I agree with everything you have said and I have already touched on some of the points you bring up. As per your specific situation, I'd bet my left nut that you don't need to go the non-profit corp route in order to benefit from certain exemptions and/or non-refundable tax credits. Only your accountant knows for sure!

[Will-Casel]

Wow, great info everybody. I really appreciate.
I knew there were plusses and minuses to this, so you gave me a lot to think about/research.

It's definitely a great hobby, though.

I do remember seeing the "hobby deduction" are while doing my taxes via TurboTax.com last year. I'll have to google that.

Thanks again.

Will

[SFEley]

Yep, I agree with everything you have said and I have already touched on some of the points you bring up. As per your specific situation, I'd bet my left nut that you don't need to go the non-profit corp route in order to benefit from certain exemptions and/or non-refundable tax credits. Only your accountant knows for sure!
Probably not, but it is the only way to allow donations to be tax-deductible, and to qualify for certain arts grants.

My first thought in going the 501(c)(3) route was the donors. Most of our donations are small, but we occasionally get donations for $50 (and we once got a $150 donation), and it'd be nice if the people who were so generous got a tax break for it. Since then I've become aware of other advantages, but also a lot of hassles.

It's not my decision alone, though. I also have a board of directors now, so if I have a conviction one way or the other I'll have to convince them too. (I posted in one of the "promoting your podcast" threads a while back on the advantages of having a good group of people with a stake in your podcast.)

[tabulator32]

Talking about taxes...don't corporations have to file four times a year and pay someone to do the laborius paperwork involved?

Its not like an EZ form.

[SFEley]

Talking about taxes...don't corporations have to file four times a year and pay someone to do the laborius paperwork involved?
I don't know about filing four times a year. Partnerships don't. I don't think LLCs do. Perhaps it's a payroll requirement, if the company has people on salary?

As for paying someone to do the paperwork -- it's a good idea to have an accountant at any point that your financial situation becomes complex. On my own individual taxes, I've done them in TurboTax in years when I've been fully employed with a W2, and hired an accountant in years when I was an independent contractor. Saved me a lot of money, because I wouldn't have been so bold with my travel deductions, etc.

[gregleck]

Yep, I agree with everything you have said and I have already touched on some of the points you bring up. As per your specific situation, I'd bet my left nut that you don't need to go the non-profit corp route in order to benefit from certain exemptions and/or non-refundable tax credits. Only your accountant knows for sure!
Probably not, but it is the only way to allow donations to be tax-deductible, and to qualify for certain arts grants.

My first thought in going the 501(c)(3) route was the donors. Most of our donations are small, but we occasionally get donations for $50 (and we once got a $150 donation), and it'd be nice if the people who were so generous got a tax break for it. Since then I've become aware of other advantages, but also a lot of hassles.

It's not my decision alone, though. I also have a board of directors now, so if I have a conviction one way or the other I'll have to convince them too. (I posted in one of the "promoting your podcast" threads a while back on the advantages of having a good group of people with a stake in your podcast.)


"Board of directors"? In what capacity?

[tabulator32]

Talking about taxes...don't corporations have to file four times a year and pay someone to do the laborius paperwork involved?
I don't know about filing four times a year. Partnerships don't. I don't think LLCs do. Perhaps it's a payroll requirement, if the company has people on salary?
I'm honestly not certain. I know that all corporations don't but I understand certain types of corporations do have to file quarterly. I believe you're right and that it must pertain to larger businesses.

As to the topic in general, though, I might consider a pre-paid legal account or something similar if I thought I really needed legal assistance for my podcast (unless I had a huge show that made a lot of money and I don't foresee THAT being a problem any time soon!)

8)

[SFEley]

"Board of directors"? In what capacity?
That's the formal sense of it. In an informal sense they're a group of people who've done various sorts of work for the podcast, who help to make sure things get done, set policy, and give advice. Some are writer friends of mine, and some are fellow podcasters. It takes more work to produce Escape Pod than most other podcasts, and turning it into a team effort helps to take some of the stress off.

Of course anybody could assemble such a group for their podcast. The reason I set this up as a board is because if we are going to incorporate as a non-profit, we have to have directors. It's one of the requirements. And even if we don't, it's not a bad idea to share the work, the fun, and the reward.

[gregleck]

"Board of directors"? In what capacity?
That's the formal sense of it. In an informal sense they're a group of people who've done various sorts of work for the podcast, who help to make sure things get done, set policy, and give advice. Some are writer friends of mine, and some are fellow podcasters. It takes more work to produce Escape Pod than most other podcasts, and turning it into a team effort helps to take some of the stress off.

Of course anybody could assemble such a group for their podcast. The reason I set this up as a board is because if we are going to incorporate as a non-profit, we have to have directors. It's one of the requirements. And even if we don't, it's not a bad idea to share the work, the fun, and the reward.


So in other words, not a board of directors.

[SFEley]

So in other words, not a board of directors.
No, it is a board of directors. We have a president, a treasurer, a secretary, etc., and it's all structured in compliance with our articles of incorporation. (Which haven't been submitted to the state yet, but they've been written.) The principal purpose is to set policy and ensure that the chartered activities of the organization are carried out, which is exactly what directors of a non-profit corporation are supposed to do. That we're all friends and that we have fun doing it does not change its nature.

I know what I'm talking about, Greg. If you have any questions, ask them and I'll answer to the best of my ability, but if you're just going to be a smartass and tell me about my own business, this is the last response you're likely to get from me.

[gregleck]

So in other words, not a board of directors.
No, it is a board of directors. We have a president, a treasurer, a secretary, etc., and it's all structured in compliance with our articles of incorporation. (Which haven't been submitted to the state yet, but they've been written.) The principal purpose is to set policy and ensure that the chartered activities of the organization are carried out, which is exactly what directors of a non-profit corporation are supposed to do. That we're all friends and that we have fun doing it does not change its nature.

I know what I'm talking about, Greg. If you have any questions, ask them and I'll answer to the best of my ability, but if you're just going to be a smartass and tell me about my own business, this is the last response you're likely to get from me.

lol... this is absolutely the funniest thing I have heard this year and thank you for being the subject of my next stellar (yet awesome) podcast.

You want my advice? Of course you do. Spend less time podcasting and pretending to be a captain of industry.... and.... WRITE!

I'll tell you your own business because you need me to do so. You will never get anywhere if you follow the path you are on now. I think in your heart you know this to be true.

[ElNacho]

we can all see you've used ur advice, being so succesful and all at such a young age

[tabulator32]

I'll tell you your own business because you need me to do so. You will never get anywhere if you follow the path you are on now. I think in your heart you know this to be true.

Five minutes in any library would let you know that a designated board of directors is a requirement for a corporation. At any rate, it would appear your next show will be another searing implementation of your sarcasm sans wit and a declaration of your own ignorance and decision to eschew any type of research or actual knowledge.

I know its hard for you to accept that you will never be Russ Martin and I commend you for trying, but YOU'RE following YOUR dream, so I hope your cousins and your other listener enjoy your show.

All the best!

[gregleck]

I'll tell you your own business because you need me to do so. You will never get anywhere if you follow the path you are on now. I think in your heart you know this to be true.

Five minutes in any library would let you know that a designated board of directors is a requirement for a corporation. At any rate, it would appear your next show will be another searing implementation of your sarcasm sans wit and a declaration of your own ignorance and decision to eschew any type of research or actual knowledge.

I know its hard for you to accept that you will never be Russ Martin and I commend you for trying, but YOU'RE following YOUR dream, so I hope your cousins and your other listener enjoy your show.

All the best!

Yes, but unfortunately for the other poster, no such corporation exists. What's next, fake shareholders?

As for my show, it's the greatest.

[ElNacho]

from openly saying his show's quality is **** and he doesnt give a crap to continually praising his own show, it's gregleck! the annoying adolescant!

[gregleck]

from openly saying his show's quality is sh*t and he doesnt give a crap to continually praising his own show, it's gregleck! the annoying adolescant!

If you don't like my show, you should protest by lighting yourself on fire.

[ElNacho]

i dint give any opinions of my own regardin ur show...