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RE: Was Health Insurance for Engineers - Now incorporation

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-----Original Message-----
From: Jordan Truesdell, PE [mailto:seaint1(--nospam--at)truesdellengineering.com] 
Sent: Monday, June 06, 2005 12:53 PM
To: seaint(--nospam--at)seaint.org
Subject: Re: Was Health Insurance for Engineers - Now incorporation

I am careful 
to keep my "corporate veil" intact, primarily meaning that me and my 
corporation are two entirely separate financial entities, and the only 
exchange of cash and property happen above the table, with all necessary

tax ramifications.

-----/Original Message-----

Well, as a matter of fact this is true whether you're incorporated or
not because the IRS takes a dim view of those who attempt to "pose" as a
business just to get out of personal tax liability--and I've been
advised they'll disallow pretty much everything if they suspect that to
be the case.

We had a discussion in here several years back about "personal checking
account vs. separate business account." Some contended that, as "sole
proprietors," they didn't need to keep two accounts as long as the books
were correct.

But I've since learned (at least in the opinions of two or three CPAs
I've discussed this with) that this is NOT good practice because, again,
it can lead the IRS to conclude that you're "not a real business" after
all.

So again, in PRACTICE I have yet to see the benefit of sole
proprietorship vs. incorporation in its many forms. Joran's comments
about taking on employees is pertinent--and it's the "border" over
which, should I ever cross it, I'll make sure I'm incorporated first.


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