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    3 Replies Latest reply on Jun 28, 2009 6:52 PM by rjc2324

    New consulting services company - questions

    bonbaby Newbie

      Last month, my spouse and I set up a LLC in MA. I am working on a corp-to-corp contract (providing computer consulting services) with a client. We have been billing the client every week (but ahem.. have not seen much of the green stuff come in yet - they pay out Net 30 - I hope!).

      In any case, here are my questions:

      • I guess I am both an employee and an officer of the company. Do I have to run payroll monthly, or can I wait till the client actually pays up, and then run payroll for a few weeks at a time?

      • I am still undecided on the BOA payroll product, vs. Quickbooks online (which is free). Any recommendations?

      • So far, most expenses (corp setup etc.) have been out my personal credit card. Do I have to "officially" file an expense report to claim back the money from the company (once the client actually pays up!)?

      • We want to elect to be an S Corp. From what I understand, this means at the end of the year, any "profits" or non-distributed reserves will be taxed to us as "regular busoness income". Is this correct?

      • When we run payroll, I plan to file additional taxes based on the amount of money coming in. Should the company still file estimated taxes, or would my "extra" tax withholding be enough?

      • This is a very short term contract. There is a possibility that I will go back to working full-time on W2 after this contract. Can I still deduct a laptop as a legitimate expense (I plan to use this laptop for work at my client site). Not sure what will happen to the corporation if I go back to working W2.

      Thanks for your help!


        • Re: New consulting services company - questions
          LUCKIEST Guide
          New consulting services company, Welcome Bonbaby

          Payroll, You can run it whenever you want. Weekly, Monthly or Yearly
          Quickbooks is on sale this week at Staples (One FREE, One at half price)
          YES you should prepare an expense report. "officially" file with who??
          Yes you should also talk to an accountant.

          Good luck, LUCKIEST
          • Re: New consulting services company - questions
            thompson Newbie
            I have a prosvcs firm as well. Payroll whenever you want. Highly recommend the BofA service for this. Its so easy. Really. Here's a snapshot at what I use...

            Payroll: BofA
            Receipt scanning: Shoeboxed ($19)
            Invoicing (and subcontractor billing to us): Freshbooks ($14)
            Financial Reporting: Outright (free and connects with Shoeboxed and Freshbooks)
            Exchange Email: LiveOffice ($5-12 per user per mo)
            Domain name / DNS: Godaddy ($8 per year)

            Yes, file an expense report to your company and then reimburse through BofA payroll. Shoeboxed makes it easy to track the scanned receipts.

            May be better to set up corp credit card if possible to keep things clean.

            Any profits will be distrib to shareholders based on their % of shares. File a K for reporting after closing the books at Y/E.

            Make sure to file your S-Corp election within 60 - 90 days of inception of the company.

            http://I still need help on figuring out the corp est. taxes filed quarterly (which we do) vs the self employment tax vs. the self employment tax estimated amounts - - anyone?

            Yes, the laptop is a deductible expense if used soley for the business. Id handle it through reimbursement. If you dont want to do that, then keep it on your personal tax return as a non-reimbursed business expense, where you could choose to depreciate it.

            Highly reccomend liability insurance for you... and probably errors & omissions if you're doing "advisory" work or work that could cause a significant impact, even if perceived.
            • Re: New consulting services company - questions

              We would love to help you out. Your questions however are more appropriate for a discussion than for a response on this forum because so many are neither black or white. Please feel free to check us out and contact us at

              RJC CPA