If you are working and collecting money under your individual name, it’s a good idea to incorporate a company for numerous reasons. In most cases, we can suggest you create a Professional Association (or “PA”) to operate your business. This means that your clients will pay your company instead of you. Below we’ll show you some excellent reasons why you should be incorporating a PA.
Separation of Liability
More Professional Presence
Savings in Tax
Great for Real Estate Agents
Great for anybody that earns 1099 Income
Savings in Self Employment Tax
If you earn money to your individual name, you will be subject to INCOME Tax and SELF-EMPLOYMENT Tax on your entire income. If you choose to create a PA, you will not owe self-employment tax on the entire income. Self-Employment tax is 15%. That’s a lot of additional tax.