• Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Home
  • About
  • Forum
  • Design Studio
  • Upholstery Jobs
  • Newsletter
  • Sponsors

The Hog Ring

Auto Upholstery Community

  • Facebook
  • Instagram
  • Twitter

Why Incorporate Your Auto Trim Shop?

May 17, 2011 By Nadeem Muaddi

Now that US tax season over, it’s time to consider incorporating your shop. Doing so will help you save money on next year’s tax return and limit your liability if something goes wrong. Small Business Trends recently published an article that does a great job of explaining how.

Small Business Trend writes:

The S Corporation can help business owners reduce their self-employment or Social Security/Medicare taxes. As an S Corporation, you’re able to split your profits into two payment types: salary and S Corp distributions. You pay Social Security/Medicare tax (i.e. 15.3 percent) only on the salary portion. Meaning, if your business made $100,000 in profit and you pay yourself $50,000 in salary (and then $50,000 in distributions), you’ll only need to pay the Social Security tax on the first $50,000.

Of course, you can’t just go ahead and pay yourself $5,000 in salary and $95,000 in distribution. The IRS looks for “reasonable compensation” for any shareholder who is employed by the business. And they do watch this closely. This means you need to make sure you’re paying yourself market rate for the services you provide to the S Corporation. […]

Without incorporating your business or forming a Limited Liability Company (LLC), your own personal savings and property are at risk to settle any debts of the business. Once your business is an S Corporation, C Corporation or LLC, it becomes a separate legal entity. This means that the corporation or LLC (and not you) is responsible for all of its debts and liabilities.

I know you don’t anticipate angering clients or defaulting on any payments. And most likely, you’ll never encounter this kind of trouble. But things do happen. A legal business structure gives you peace of mind that your retirement savings won’t be wiped out by your business venture. And since creditor judgments can actually last a total of 22 years, forming an LLC or corporation can protect the assets you’ll have in the future, not just what you own today. [more]

If you’re still running your shop as a sole proprietorship, but want to take the business to the next level – now’s the time to act. Contact a local lawyer who specializes in incorporating businesses in your state and find out what you need to do to reap the benefits of a corporation.

Filed Under: Archive, Better Business Tagged With: Auto Trim, Auto Upholstery, Business Tips, Car Interior

Reader Interactions

Comments

  1. Edward Munday says

    April 19, 2013 at 4:36 pm

    Retired…Inc So The Bussiness Will Continue To Be Yours, You Have No Ideal How Easy It Is For Some One To Take It From You.If A Company Goes Bankrupt This Will Keep The Share Holder Or Share Holders Protected As Well Your Tax Situation Will Also Change To The Good. Its Just Not Safe To Operate As A Sole Propritor/OwnerOperator Any Longer. As Far As The Slip Covers Are For , They Would Help Protect New Car Seat Covers I Would Think But An Auto Trimmer Likes Things Done The Hard Way We Usually Get Paid For What We Know And What We Have Done The Harder The Better For Us. If Every One Knows How To Do It And Needs No Special Tools To Accomplish The Job Then Usually It Becomes Worthless To Do The Job.

Primary Sidebar

anal porno bangbros rus porno yaşlı porno konulu porno olgun porno porno izle sarışın porno bakire sex 69 porno

THR Sponsors

NC Sewing Machines
Miami Corporation - Right Rail Ad 3
  • Keyston Bros
  • Albright's Supply
  • Leather Craft
  • Douglass Interior Products
  • Hyde Leather
  • OEM+ Banner Ad - The Hog Ring

THR Favorites

Auto Upholstery - The Hog Ring - Ish Jimenez - West Coast Customs

Talking Shop with Trimmer Ish Jimenez 1

Ish Jimenez, master trimmer and former star … [more] about Talking Shop with Trimmer Ish Jimenez 1

Auto Upholstery - The Hog Ring - How To Mold Automotive Leather

Pro Tip: How to Mold Automotive Leather

Interested in learning how to wrap virtually … [more] about Pro Tip: How to Mold Automotive Leather

Auto Upholstery in the Early 1900s

Trimmers have a long and storied past – one … [more] about Auto Upholstery in the Early 1900s

Auto Upholstery - The Hog Ring - Nissan Do Not Resew Policy

Leaked: Nissan ‘Do Not Resew’ Policy

Last year, we reported on the controversial … [more] about Leaked: Nissan ‘Do Not Resew’ Policy

Auto Upholstery - The Hog Ring - Bentley Motors Leather Shop

A Visit to Bentley Motors’ Leather Workshop

We know that Bentley Motors creates some of … [more] about A Visit to Bentley Motors’ Leather Workshop

Repair Dashboards with Vacuum Forming

Most auto upholstery shops repair vehicle … [more] about Repair Dashboards with Vacuum Forming

Categories

Footer

Recent Articles

  • Running a Trim Shop is Hard. This Free SBA Tool Makes It Easier
  • Subaru Seat Bolsters Are Failing. Here’s How to Fix Them (and Make Money)
  • Support Trimmers Affected by Catastrophic Flooding in Texas
  • Mercedes Reimagines Comfort with Custom Fit, 3D Printed Seat Pads
  • Wishing You a Happy Independence Day!

Recent Comments

  • Edward Munday on Hidden Mouse Nest? How to Charge for the Extra Dirty Work
  • Jack on Keyston Bros. Acquires DLT Corporation
  • Brodie Smith on Aston Martin Just Introduced a New Convertible DB12
  • THE CAPTAIN on 6 Tips for Turning Callers into Customers
  • Dmei on Star Wars Seat Covers are ‘So Wizard’

Advertise With Us!

We're always looking for companies to collaborate with. Watch this short video about the benefits of sponsorship and then email us to say hi.

Copyright © 2025 · Magazine Pro On Genesis Framework · WordPress · Log in