Feeling like I have been thrown under the bus...

[crusader rabbit]

Just a couple of thoughts echoing what JayBet said...

Incorporate.  You can usually do it yourself and it offers great protections from lawsuits, bad debts, and the like.

Pay yourself minimally and declare dividends when you need some money.  You avoid payroll taxes this way and if you're self employed, you will be paying both sides of the payroll tax.  Dividends can be declared whenever and should not be in a set weekly amount because that looks like you are trying to avoid payroll taxes (which, of course you are).

30% to 40% of all monies coming to the corporation get stuck into an interest bearing savings account immediately.  If you can manage 50%, that's better.  You will be able to avoid paying quarterly tax estimates for the first business year, but Uncle Sam will definitely look forward to those payments beginning in year two.  As JayBet noted, getting socked with a tax burden at the end of the year can be more than a kick in the teeth.  It can put you out of business and you will still owe the money.  Uncle is pretty one-way about things like that.  And an added benefit is that you will likely get a refund at the end of the first several years.

Start keeping really good expense records.  Anything you purchase for the company is deductible, but you need to have a record of it.  This includes all mileage on your personal vehicle or, if you have a dedicated business vehicle, all mileage.  I don't know what the current rate per mile is, but it can make a substantial impact on your wallet.

If you have an extra room in your house, make it your office.  Put a lock on the door and use it only for business.  Figure out what percentage of your total house square footage is contained within the walls of that room and that percentage can apply to the total monthly cost of maintaining your home.  You will deduct that amount from gross receipts at tax time.

The IRS is pretty flexible about how long you have to show a profit.  You may be able to run a break-even business that pays all your bills but has limited tax liabilities.  And you may be able to run this business for several years before anyone questions you about profitability.

Finally, don't take anything anyone tells you for gospel--especially some Ranger on a gun-nut thread.  Do your research.  Confirm everything with a CPA.  And that's probably the most important advice I can give you:  get a good CPA.  Mine saved me thousands over the years (and probably some jail time, too).

Here's my disclaimer:  Nothing in the above post is to be construed as legal, financial, tax, or moral advice.  Any decisions about your actions and activities are your decisions alone and should NEVER be based on suggestions from members of a gun forum.  Everything detailed in the above post may well be total BS and is offered for entertainment value only.

That said, good luck and keep us posted as things progress.  And MEET WITH A GOOD CPA OR TAX ATTORNEY.  That will be money well spent.

Crusader Rabbit

[Magoo541]

Having gone through  a job change both 3 years ago and also a year ago I wish you luck. I am now 60 so new jobs are getting more difficult. Try to find one you love. That way you will never feel like you are working.

I have been rather fortunate in that I've done what I love, or rather have learned to love what I have done, for the last 20 years-especially the last 9 years in custom automation.  Machining has been a great career and I wouldn't trade it for anything but I went back to school for Business Management a few years ago and made the transfer at this last job.  I am beginning to feel like John Paul, of JP rifles fame, in that I may be unemployable-which is why I am looking into starting my own business. 


Rabbit, thanks for the advice and info.  That is what I was looking for, where the landmines might be 

To throw a little monkey wrench in all of this an automation company where a lot of my previous coworkers ended up has shown interest in hiring me, although it isn't clear for what position.  I'm trying to leave this all in God's hands and do what I can but the self-employed aspect is the best looking option from where I stand-even if, as Tab said, I'll be working for an A$$hole.

Thank you brothers, I'll keep you posted!

[Magoo541]

Filed out an application for Provisional Patent Application today, I'll file tomorrow. Nothing gun specific, talk about a saturated market, but it fills a niche. Once I have been approved I'll post up some screen shots of the model and some detail. I have been working on this idea for a few, ehem... 5, and it feels great to take the this to the next step. Thanks for the help & motivation 

[billt]

Machining has been a great career and I wouldn't trade it for anything but I went back to school for Business Management a few years ago and made the transfer at this last job.

Machining in general is a broad brush of a trade in itself. There are just so many different aspects of it. I started in 1971 in the die cast mold business as an apprentice mold maker. After serving a 10,000 hour training program, (5 years), which at the time was government certified, I worked in that field for a total of 24 years. 16 of it at the same company.

I then went into plastics, which is an entirely different ball game. Much closer tolerances, and far more complex molds. I did that for a total of 4 years. The money was great, but hours were brutal. Nothing under 60-65 hours a week. And all of it was push, push. I tired of that schedule quickly. Both mentally and physically. It basically consisted of work, eat, and sleep. The one day a week I had off, (Sunday), I was too exhausted to really do anything.

I then was hired by a company here in the Phoenix area that was the best place I ever worked at. Great people, and only worked weekends. It consisted of mostly aerospace machining, along with some semi conductor work thrown in for good measure. They had excellent equipment, and no one pushed you. I stayed there until I retired a year ago this past December.

Unfortunately I think machining in this country has it's best day's behind it. A lot of the work we did is now going to Pacific Rim countries. Singapore and the like. I'm glad I was able to retire when I did. I still keep in touch with some of the guys I worked with over the years. And most of them have said the same. The trade isn't what it used to be. The company I served my apprenticeship with went under in 2000. I never thought that would happen. They were in business since before the Second World War. That company made millionaires out of 7 separate families through the years. Now it's gone.

[Timothy]

Bill,

I think the reason behind the "no rush" aerospace machining and fabrication industries is due partly to the philosophy that "bad parts rotating at high speed kill people" mentality.  I've stayed away from AS9100 work here because of the stringent aircraft specifications.  You were probably working for a well managed company.

Shitty management can kill a productive company in short order...

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