Pretty much I am starting my own small business while I am in college.

I expect to net 1045.00 yearly from each customer minimum.

After talking to my father he says I should just register it as non-profit, reinvest the earnings back into my business via buying new equipment, paying for college, etc.

After reading a thread here, is it legit (i know most universities are non-profit).

Also, what is the cheapest way to register a non-profit?

If non-profit is not the way to go, what do I need to do instead.

thanks for the help,

Young, witty, and inspiring small business owner.

Uhh.... I hope you dont plan on profiting from your non profit business.....

Which is why I think he is full of shit, but aslong as you reinvest into the business (according to him and universities do do it aswell) then it is still a non profit.

Anyways, since non-profit is most likely out, what would I need to do instead?

I think the better question is,

"What is more suitable a Sole proprietorship or an LLC."

A non profit organisation can still pay its employees a hefty wage.
Everything else stays in the bank account and is the 'businesses' money.
Give yourself a substantial payrise, or work 'overtime'.


Shit, you can pay yourself more than the business brings in and declare a loss and get tax credits on your income.


All safe, all legal, all documented - not easy, but not too hard.

If you are re-investing in the business that is still profit.

Maybe, but that tax credit goes to the company, which he's paid a flat 30% on in tax IN ADDITION to the grand it takes in fees to establish a corporation AND the stringent accounting requirements.

Its a thousand dollars, don't bother being clever.

Fuck, with an income stream that small you could almost call it a hobby and leave it undocumented and nobody would care.

But since we're playing 'lets suggest different ownership structures' I say TRUST FUND!

Depending on how many employees you're wanting to hire (it sounds like few, if any), then I'd probably with the sole proprietorship.

Well, if you were the only agent/owner/partner of the firm, it would be impractical to form a Limited Liability Corporation. As others have said in this tread, it is quite expensive to become incorporated, both at the start and due to taxes. Corporations, including LLCs, are taxed twice: 1) the income that the corporation as a whole generates is taxed (i.e.. the legal entity's gain, not the individual incomes of the owners) and, afterwards 2) The income of the individual owners when it is paid out is taxed.

Since you would be the only owner of the firm (the sole proprietor lol) it would be much more advantageous to file as a sole proprietorship. Your income would not be victim to double taxation as within corporations. All of your net income would be taxed once, while taking into consideration that money's reinvested back into the business and that are paying for education are probable tax write-offs.

All the more, depending on your yearly income, you might not have to file anything at all. I'm not quite sure as to the exact number, but I think that if the business receives less than $5000 in total income it needn't file.


What is your business going to be?

You probably don't want to do this more than two years out of any seven consecutive year period though.