Hi, I live in Chicago, I have a couple websites and I started to get little money each month from them. I want to take my business to the next level, and was thinking of registering my business as small business, what are the pros and cons of that? and will it save me some tax money? please share your ideas thanks in Advance
Without knowing more about your situation, no one can really provide the best information. There are several forms of business, including LLC, S-corporation, C-corporation, etc. S-corporations have tax advantages in some cases, but it would be best for you to talk with an attorney or CPA before making a decision about the best form of business.
Registering your business gives you no tax advantage. Unless you are making considerable income, forming an S-corp is not going to save you anything in taxes - it will likely cost you more with increased accounting, tax preparation, possible minimum tax, (not to mention the additional work). If you are worried about liability protection, then you might consider an llc or S-corp. Before doing so, consult with a CPA and perhaps an attorney.
It is always worthwhile to make it into a business (there is no such distinction as a small business). It protects you legally and separates your assets from the company's. This means that if someone sues you, the company can loose its money, but they can't go after your personal money or assets (such as your house, car, ect). If you are working as a sole proprietorship you have unlimited personal liability. As for the tax money, it won't save you any. If you form a corporation you will get taxed both on the company's income and on the salary you give yourself. If you form an LLC you can choose to be taxed as a corporation or be disregarded. If you choose to be disregarded (most one man operations do), the LLC's income will not be taxed but it will all reflect your personal income. This is not simple, I strongly you do your own research and go to a professional when tax time comes around. A major con is that Illinois has the second highest incorporating fees (for LLCs) in the country. The fee for an LLC is $500 plus a few annual fees. It is easy though, you just fill the form out, pay the money and you are done. Don't waste your money on the ones who "do it for you." Also, it is not cheaper to incorporate in a cheaper state like Deleware because the state makes you pay fees to operate in Illinois if you do that. Again, you need to do your own research. ps. I own QSD Consulting LLC, a Illinois based LLC.