New member from Long Island NY

[thethein11]

Hi my name is Billy I currently make and sell reflectors for cars and trucks as a hobbies but I would like to turn it into a side business.

A little information about what I do. It is just a one man operations I make custom silicone molds of a reflector (or any small plastic part) then pour liquid plastic in whatever color I want (usually clear or tinted) to make the part. Then I sell these on a truck forum since they only apply to that certain vehicle.

What I would like to do is be able to write things off to this as a business (i.e. plastic, silicone, cups, spoons, and popsicle sticks are some of the things I use to make these parts). I am also into the aftermarket truck world and go to car shows or meets where I display my products can I write off the some travel expense (i.e. gas, hotel, or entrance fee for car show).

What is my best way to go about this LLC, Sole proprietorship, etc?

[vangogh]

Welcome to the forum Billy. I grew up on Long Island. What part of the island are you from?

I don't think there's a definitive answer as to what kind of business entity to start. I'm a sole proprietor as are many others here, probably most. Some are LLCs or other corporations. You'll be able to write off things you legitimately need to run your business regardless of the entity you form. Each will have different tax issues and benefits though it's not my area of expertise so I can't provide specifics.

Sole proprietor will be the easiest set up. LLC will cost some money, though not a lot. My guess is you'll be fine as a sole proprietor.

[Patrysha]

Sole proprietor will be the easiest set up. LLC will cost some money, though not a lot. My guess is you'll be fine as a sole proprietor.

Welcome to the forum Billy.

I think the above would be true unless their are any potential liability issues which I'd think there might be since it is for vehicles.

I'm just extrapolating from what I learned from people who make diapers and slings and other things for babies I forget the details on the entity that is required for protection of assets...but I know there was something about that and insurance being vital...

[thethein11]

Welcome to the forum Billy. I grew up on Long Island. What part of the island are you from?

I don't think there's a definitive answer as to what kind of business entity to start. I'm a sole proprietor as are many others here, probably most. Some are LLCs or other corporations. You'll be able to write off things you legitimately need to run your business regardless of the entity you form. Each will have different tax issues and benefits though it's not my area of expertise so I can't provide specifics.

Sole proprietor will be the easiest set up. LLC will cost some money, though not a lot. My guess is you'll be fine as a sole proprietor.

I grew up on Shelter Island but currently live in Freeport.

Thank you for the advice seems like I will be looking into a sole propritorship and LLC further.

[thethein11]

Welcome to the forum Billy.

I think the above would be true unless their are any potential liability issues which I'd think there might be since it is for vehicles.

I'm just extrapolating from what I learned from people who make diapers and slings and other things for babies I forget the details on the entity that is required for protection of assets...but I know there was something about that and insurance being vital...

Yes there could be some liability issues I have a disclaimer that states the reflectors are for off road/show use only. Not sure if that totally covers me so I am leaning towards LLC.

[Blessed]

Welcome to the forum Billy!

[vangogh]

My family currently lives in Rockville Centre so very nearby where you are now.

By the way one of our members David (Business Attorney) has some great info about LLCs (http://www.limitedliabilitycompanycenter.com/).

[Business Attorney]

Hi, Billy. Welcome to the forum. Your question about LLCs vs sole proprietorship is a very good one. It is probably one of the questions that I hear most often when talking about LLCs. There is no single answer - there are advantages to a sole proprietorship (primarily simplicity and lower cost) but you lose the advantage of limited liability. I have an article Sole proprietorship vs LLC (Limited Liability Company) :: LLC Information (http://www.limitedliabilitycompanycenter.com/sole-proprietorship-vs-llc.html) that discusses the pros and cons in much more detail.

Good luck.

[KristineS]

Welcome to the forum Billy. I see you're already finding helpful information.

[websonalized]

If you are strongly concern about liability issues, and choose to incorporate, an S corporation is best for tax purposes (no double taxation). However, some paper work involved.

Welcome to the forum

[Evan]

I think if liability is a concern, choosing between an LLC and sole proprietorship is your first starting point. S-Corporations are not the best for tax purposes, and there are many unintended consequences with them which can and do happen. As an LLC can be taxed as an S-Corporation, that is a route to go, but I'd look first at all of the costs of forming an entity and maintaining it (just annual reports, fees to incorporate/organize, etc.) and weigh that into the equation. While it may be advantageous for federal tax perspectives, few people consider state tax implications of LLC's, and that can be a major disadvantage.