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GIG ECONOMY LLC

GIG ECONOMY LLC published on

The gig economy is also known as the sharing, on-demand, or access economy. It usually includes businesses that operate a digital platform to connect people to provide services to customers.

While there are many types of gig economy businesses, ride-sharing and home rentals are two of the most popular. Users of the digital platform (e.g., Uber, Lyft, Door Dash, VRBO) earn income providing on-demand work, services or goods.

Workers operating as drivers or other on demand work in the gig economy are classified as independent contractors rather than employees. It is recommended that Uber, Lyft, or other on demand workers form a Gig Economy LLC and use this tool to lower your tax bill and to protect your assets.

Benefits of Spiegel & Utrera, P.A.’s Gig Economy LLC

Lower your Tax Bill with a Gig Economy LLC

By reporting Uber, Lyft, Door Dash, VRBO, etc. earnings under the umbrella of a business structure you may be able to lower your tax bill. An accountant or tax preparer will be able to assist you with deductions related to paying for health insurance, setting up a retirement account, claiming the qualified business income deduction, car expenses, depreciation expenses, home office deductions, financing costs for your business.

Avoid Personal liability with a Gig Economy LLC

Working in the gig economy can mean freedom and a better income, but it also means personal liability if there’s an accident or misunderstanding between you, the client, or the digital platform.

You will want to protect yourself and family assets by forming a Gig Economy LLC. LLCs generally don’t require a ton of maintenance, the LLC protects your assets, and offer potential tax savings.

Operating your business as a sole proprietorship (yourself) or as a DBA is not recommend because your personal assets — like your house, car, personal bank accounts, etc. — would be at risk if you are sued.

What are the benefits of forming a Gig Economy LLC

Limited Liability Protection

Starting with the most crucial benefit of a GIG ECONOMY LLC, limited liability can separate the financial and legal obligations of the company from its members. In case of a lawsuit, you can be protected due to a legal shield the entity provides, which defends personal assets. Keep in mind that this liability protection is limited and will not shield a member from wrongful or illicit acts.

Pass-Through Taxes

Another vital benefit of a GIG ECONOMY LLC is its ability to avoid federal income taxes. Taxation will bypass the LLC and go directly for the members’ profits. In this scenario, all of the money earned by the LLC can go straight to the member, and taxation will only occur on their income. Other entities such as a C-Corporation don’t have this advantage, and its leaders are essentially taxed twice.

Simplicity and Flexibility

Other GIG ECONOMY LLC benefits include its ease in formation and simplicity to sustain when compared to other entities. You don’t need to maintain certain company formalities or file taxes for the single-member LLC. You also have the flexibility of functioning as a single-member LLC, a multi-member LLC, or a multi-member LLC led by an operating manager.

Increased Perception of Credibility and Reliability

As a formal business entity, a limited liability company receives the perception of a more trustworthy business structure when compared to an individual or a sole proprietorship. Starting a GIG ECONOMY LLC adds an extra layer of reliability for employees, customers, and other businesses. Your LLC is required to adopt ‘LLC’, ‘L.L.C.’ or ‘limited liability company’ into its name, which immediately lets people know that you are a formal business and not just a fly-by-night company.

Who participates in the Gig economy?

Gig economy workers accounted for 14.1 percent to 20.5 percent of all workers in the United States. Gig economy workers on average are older than the entire workforce and the average age of gig workers has increased more rapidly. In addition, gig economy workers are more likely to be married than all workers, but the spouses of gig economy workers are less likely to have full-time jobs.

ADVANTAGES OF A MONEY SAVING 501(C) Non Profit IRS Classification

ADVANTAGES OF A MONEY SAVING 501(C) Non Profit IRS Classification published on

Having a 501(c), converting an existing corporation to a 501(c), or using a 501(c) organization under the umbrella of your entity can help your business save money, get money, attract people to the corporation and your cause, get discounts on services for the corporation, get access to specialized services for your corporation, and more. And of course, is complete with limited liability protection for your corporation. Having a 501(c) organization, which refers to a tax-exempt nonprofit organization under the Internal Revenue Code section 501(c), comes with many benefits.

Here is an expanded and complete list of the different Money Saving 501(c) nonprofit classifications recognized by the IRS:

501(c)(1): Corporations organized under the Act of Congress (including Federal Credit Unions)

501(c)(2): Title-holding corporations for exempt organizations

501(c)(3): Charitable, religious, educational, scientific, literary, testing for public safety, or prevention of cruelty to children or animal organizations

501(c)(4): Civic leagues, social welfare organizations, and local associations of employees

501(c)(5): Labor, agricultural, or horticultural organizations

501(c)(6): Business leagues, chambers of commerce, real estate boards, etc.

501(c)(7): Social and recreational clubs

501(c)(8): Fraternal beneficiary societies and associations

501(c)(9): Voluntary employees’ beneficiary associations

501(c)(10): Domestic fraternal societies and associations

501(c)(11): Teachers’ retirement fund associations

501(c)(12): Benevolent life insurance associations, mutual ditch or irrigation companies, mutual or cooperative telephone companies, etc.

501(c)(13): Cemetery companies501(c)(14): State-chartered credit unions, mutual reserve funds

501(c)(15): Mutual insurance companies or associations for casualty, etc.

501(c)(16): Cooperative organizations to finance crop operations

501(c)(17): Supplemental unemployment benefit trusts

501(c)(18): Employee-funded pension trusts (created before June 25, 1959)

501(c)(19): Post or organization of past or present members of the Armed Forces

501(c)(20): Group legal services plan organizations

501(c)(21): Black lung benefit trusts

501(c)(22): Withdrawal liability payment fund

501(c)(23): Veterans’ organizations (created before 1880)

501(c)(24): Section 4049 ERISA trust organizations

501(c)(25): Title-holding corporations or trusts with multiple parents

501(c)(26): State-sponsored organization providing health coverage for high-risk individuals

501(c)(27): State-sponsored workers’ compensation reinsurance organization

501(c)(28): National Railroad Retirement Investment Trust501(c)(29): Qualified nonprofit health insurance issuers participating in the CO-OP program

501(c)(30): Qualified nonprofit organizations that provide health coverage for patients in certain areas

501(c)(31): Qualified nonprofit organizations operating as Medicare Prescription Drug Card Sponsors

TAX EXEMPT APPLICATION PROCESS AND 501(c)(3) CORPORATE RECORDS COMPLIANCE

To obtain a favorable Federal Income Tax exemption determination from the Internal Revenue Service, your corporation will be subjected to a lengthy (about 6 to 9 months regularly, 2 to 3 months if expedited) and often cumbersome Internal Revenue Service investigation and approval process. During this period, the Internal Revenue Service will review the documents provided, make additional demands, and scrutinize corporate records and detailed information regarding your corporation’s activities. Your Articles of Incorporation, Corporate By-laws, and other corporate documents must include the proper information to comply with Internal Revenue Service Regulations. If you have an existing non-profit corporation that does not meet the requirements of 501(c)(3), it will be necessary to make changes to the Articles of Incorporation and draft the appropriate corporate documents so that your non-profit corporation is in compliance.

LIST OF ADVANTAGES FOR A MONEY SAVING 501(c) ORGANIZATION

1. Tax-exempt status: The primary benefit of being a 501(c) organization is the exemption from federal income tax. This means that the organization’s income, donations, and certain activities are generally not subject to federal income tax, allowing more resources to go toward the organization’s mission.
2. Deductible donations: Donors to 501(c) organizations can generally deduct their contributions from their taxable income, incentivizing individuals and businesses to support charitable causes. This can help attract more donations and support for the organization.
3. Eligibility for grants and funding: Many foundations, government agencies, and other grant-making organizations provide funding exclusively to tax-exempt 501(c) organizations. Having 501(c) status can enhance an organization’s eligibility for grants and increase opportunities to secure funding for projects and programs.
4. Credibility and trust: Being a recognized tax-exempt organization lends credibility and trustworthiness to the organization. Potential donors, supporters, and stakeholders often view 501(c) status as a mark of legitimacy, which can boost confidence in the organization’s mission and activities.
5. Eligibility for certain exemptions and discounts: 501(c) organizations may be eligible for various exemptions and discounts, such as property tax exemptions, reduced postal rates for mailings, and discounts on certain goods and services.
6. Access to certain resources and services: Nonprofits with 501(c) status may have access to specialized resources and services, such as discounted software, volunteer support networks, capacity-building programs, and training opportunities offered by nonprofit associations or foundations.
7. Limited liability protection: Forming a nonprofit corporation under 501(c) status can provide limited liability protection to the organization’s officers, directors, and members, shielding them from personal liability for the organization’s debts and obligations in most cases.

It’s important to note that specific benefits and requirements may vary depending on the particular 501(c) classification and applicable state laws. Consulting with legal and tax professionals or nonprofit experts is advisable to fully understand the benefits and obligations associated with obtaining and maintaining 501(c) status.

For example, a 501(c)(3) organization is a non-profit corporation formed to carry out a charitable, religious, literary, educational, or scientific purpose that is recognized by the Internal Revenue Service as tax-exempt. Such a 501(c)(3) non-profit corporation doesn’t pay federal or state corporate income tax on profits it makes from events carried out in furtherance of its exempt function. In essence, this is because both state and federal taxing authorities believe that the benefits the public receives from these organizations entitle them to this advantageous tax-exempt status. These corporations are known as 501(c)(3) non-profit corporations because they are granted tax-exempt status from Section 501(c)(3) of the Internal Revenue Code.

Building In Financial Forecasts For Your Business Plan

Building In Financial Forecasts For Your Business Plan published on

To attract investors and build a line of credit you need to project business finances

Essentially, you must make educated guesses about how much money will be spent and how much will be taken in. Then you can use these estimates to calculate whether your business will be sufficiently profitable to sustain a bottom line. Usually a business will start off operating lean until you start building a customer base. If your projections show your business losing money initially, then you must consider raising prices or cutting costs while still in the planning stage. This can help you avoid sinking money into a business that cannot be profitable. On the other hand, if your business model shows profitability, then you can start to invest more and build your enterprise.

Business Plan

Understanding projected financial situation through estimates and calculations

Start off with a break-even analysis by estimating income and expenses over the first year. In theory you should be able to turn a profit by the end of the first year. If not, then you must reconsider the business model. After determining the business can turn a profit, then turn to a month-by-month projection of your business’s net profits for the first year. Keep in mind that some businesses will be more or less profitable during certain months due to seasonal turnover. Finally, determine a start-up cost estimate. There are few generic costs that are common to all business types, they include, research expenses, insurance, business license, incorporation costs, permit fees, equipment and supplies, advertising and promotion, borrowing costs, employee costs and technological expenses.  These costs should be included in your business plan to give a true picture of how much money you will need to get off the ground.

 

 

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have business related questions, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a member of the  General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service,Trademarks, Copyrights, Estate Planning, Legal Counsel, Wills,Trusts, Agreements & Leases, Corporate & Company

Funding Your Small Business: Consider Crowdfunding

Funding Your Small Business: Consider Crowdfunding published on

The recession of 2008-2009 made it increasingly difficult to obtain a small business loan. Most lenders want to see an existing financial record that reassures them you will be able to repay the loan. Remember that banks are lenders. They are not investors and they’re not interested in making equity investments in businesses. What is an entrepreneur to do? Most entrepreneurs start their small business with personal savings, credit cards, and personal loans from family and friends.

Crowdfunding

An alternative that is popular with entrepreneurs is Crowdfunding through websites such as Kickstarter and Indiegogo. Crowdfunding essentially utilizes other backers to finance your product or business. To date, Kickstarter startups have raised over $2,500,000,000 and Indiegogo has funded over $800,000,000.

There are several reasons why crowdfunding may be the answer to financing your business. In an economy where e-commerce allows us to easily make online purchases with the click of the mouse, many consumers still crave more personal connections and are opting for small startups. Investors are always eager to be a part of a startup’s success. Additionally, entrepreneurs who can’t qualify for a bank loan or have decided the risks associated with obtaining a bank loan far outweigh the benefits can pursue crowdfunding without worrying about risks.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have business related questions, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a member of the  General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service, Trademarks, Copyrights, Estate Planning, Legal Counsel, Wills,Trusts, Agreements & Leases, Corporate & Company

Two Ways Your Business Can Raise Money

Two Ways Your Business Can Raise Money published on

There are several ways that businesses can raise money. Some are very well known while others are not as familiar to business owners. Below are two ways your business can raise money that may be unfamiliar:

Raise Money

1. ROBS Programs on a 401(k): Rollovers as Business Startups (ROBS) are programs tat allow a business owner to take tax-deferred retirement funds and use them to start or buy a business without early withdrawal penalties. Do be careful as these programs have a very complex rules provided by the IRS and if not handled correctly could result in penalties and other issues.

2. Vendors: If you are a good customer you could ask a vendor if he or she offers any extended repayment terms. Vendors may have their own financing programs or terms. “Pay on scan” could be one option, where the supplier is paid for the inventory only when it is sold to a customer. There are many costs that can be eliminated to allow your business to operate more efficiently and save money.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have business related questions, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a member of the  General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service,Trademarks,Copyrights,Estate Planning, Legal Counsel, Wills,Trusts, Agreements & Leases, Corporate & Company

State Attorney Scrutinizes Not For Profits Bookkeeping Records

State Attorney Scrutinizes Not For Profits Bookkeeping Records published on

A state attorney general has recently investigated several not-for-profit corporations under suspicion that the organizations’ officers have misappropriated funds, using the companies as fronts to cover for large-scale defrauding and use of donations to fund lavish lifestyles. In one case, the attorney general’s investigation and subsequent trial resulted in a verdict convicting two organization officers of conspiring to steal over $50,000. The not-for-profit ran a lunch program for senior citizens; however, the jury found that the officers routinely submitted false monthly contract and service invoice reports, inflating the costs of the lunches and enabling the officers to skim money. Both officers were charged with several felony accounts and have been sentenced to probation and a combined total of $50,000 in fines. The restaurant owner of the shop from which the organization obtained the lunches previously pleaded guilty to Falsifying Business Records in the First Degree; he was sentenced to conditional discharge and restitution of $25,000.

webgavel

In another case, an executive director was arraigned for allegedly defrauding Medicaid for services rendered to the organization’s clients, including a developmentally disabled person directly under the director’s care. The complaint alleges that the director, responsible for coordinating and providing care to developmentally disabled individuals, double-billed her work, both submitting false time sheets for compensation through an independent employer and claiming medicaid for services rendered through the not-for-profit. She also allegedly used the money from clients’ bank accounts to cover personal expenses. If convicted, the director can face up to 1 1/3 to 4 years in prison.

If you are running a not-for-profit organization, it is critical that your bookkeeping and legal records be accurate and up to date, ensuring also that any required registrations and annual filings with your state attorney general’s office are maintained.

 

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have business related questions, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a member of the  General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service, Trademarks,Copyrights,Estate Planning, Legal Counsel, Wills,Trusts, Agreements & Leases, Corporate & Company

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If You Are Looking To Buy Or Sell A Business, Seller Financing Is Key To Success

If You Are Looking To Buy Or Sell A Business, Seller Financing Is Key To Success published on

With the changing state of the economy it is becoming harder and harder for entrepreneurs to acquire loans for buying or selling a business. However, this can be easily solved through Seller Financing. Essentially, the seller will be paid for the business over time instead of one lump sum. In turn the seller can protect himself by assuming ownership if the buyer misses payment.

Seller Financing

Additional seller protection can be achieved by securing a loan against the business’s hard assets, a mortgage on the buyer’s home along with personal guarantee signed by the buyer and the buyer’s spouse. Safety when selling a business can only be accomplished through carefully drafted agreements and proper documentation.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have questions about SBA 504 Loans, call (800) 734-9900 orclubassist@amerilawyer.comfor assistance. Remember, as a member of the  General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service, Trademarks, Copyrights,Estate Planning, Legal Counsel, Wills, Trusts, Agreements & Leases, Corporate & Company

Misclassifying Workers Can Lead To Costly Penalties

Misclassifying Workers Can Lead To Costly Penalties published on

 

Avoiding payroll taxes by intentionally or unintentionally misclassifying employees as independent contractors is a costly mistake.

 

Most often the misclassification will be discovered during an audit or if a former worker files a complaint. Under “the twenty factor test” in Revenue Ruling 87-41, an employee is anyone who performs services for an employer if the employer can control what will be done and how it will be done. However, in an independent contractor relationship the employer has the right to control or direct only the result of the work done, and not the means and methods of a accomplishing the result.

 

How to properly create an independent contractor relationship

Foremost, you must have an independent contractor agreement in place. This will help define the responsibilities of the independent contractor to follow proper standards under the law. Next, the independent contractor should set up his own corporation or LLC. Then the  independent contractor relationship is between two entities. This helps the employer prove he is not controlling methods to accomplish the result.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have business related questions, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a member of the  General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service, Trademarks, Copyrights, Estate Planning, Legal Counsel, Wills,Trusts, Agreements & Leases, Corporate & Company

 

Investors Willing To Take Risks Along With Uber

Investors Willing To Take Risks Along With Uber published on

Despite ongoing  litigation involving labor disputes between its drivers, it seems wealthy investors are still willing to invest boatloads of money to be a part of Uber. A special fund known as New Riders L.P. -a lesser-known contribution to the billions of dollars in capital that Uber has been raising-allows investors to bet on Uber’s success. However, investors appear to be doing this blindly.

The financial disclosures on revenue and projections are being provided to investors but the offering document for the New Riders fund does not provide any financial details about Uber itself. Additionally, equity in Uber is obtained indirectly through the fund offering little in ways of protection. Despite this, the latest round offered commitments of upwards of $500 million which values Uber at $62.5 billion. The fund’s investors seek to profit the moment Uber decides to go public at a presumable higher valuation. Such risky investments seem to be the pattern of investors with deep pockets as other investors have sought preferred stock in companies such as Facebook before they went public. The possibilities surrounding Uber allow it to solicit large quantities of capital without having to disclose too much financial information.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have business related questions, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a member of the  General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service, Trademarks, Copyrights, Estate Planning, Legal Counsel, Wills,Trusts, Agreements & Leases, Corporate & Company

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Congress Offers A New Path For Angel Investors

Congress Offers A New Path For Angel Investors published on

Congress has recently made changes benefiting angel investors, likely to improve the returns on their investment portfolios through tax relief. The Protecting Americans from Tax Hikes Act (PATH) addresses the taxability of investments made in Corporations offering Qualified Small Business Stock (QSBS).

Angel

The Internal Revenue Code defines the requirements for making investment in your business as offering QSBS to angel investors for capital investment. The most important aspect of PATH to an angel investor is excluding the investment from the Alternative Minimum Tax thereby removing the investment from being taxes at the federal level. Gaining a QSBS status for your offering will make investing in your business very attractive to angel investors and allow you to raise money for your business.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have business related questions, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a member of the  General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service, Trademarks, Copyrights, Estate Planning, Legal Counsel, Wills,Trusts, Agreements & Leases, Corporate & Company

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