This video demonstrates how to save major money by incorporating your business now, before getting your contractor license with the state of California. Transcript:
Hey guys, welcome, my name is Allen from
the Contractor License School and I want
to encourage you - the topic today is "Why
Incorporate Now?" Well, there are a variety
of reasons first of all I want you to
take a look at these for once you get
your contractor's license and you're a
sole proprietor you're running under
your own social security number and you
decide the next year to go ahead and
incorporate you're gonna have to repay
the five hundred and thirty dollars that
you paid originally to get your
contractor's license to the State Board
so there's no 530 contractors state fee
if you incorporate now while you're in
the process of getting your contractor's
license the second thing is is there's
no new bond which is about a hundred
dollars as you can see there that you're
gonna have to get because once you get
your contractor's license and you go to
incorporate you're gonna have to pay for
that all over again same thing is
there's no new general liability
insurance which is about fourteen
hundred dollars you can see here and so
again once you get your contractor's
license you're gonna have to pay all
that all over again to redo everything
to become incorporation the other thing
is is lower taxes so I want to encourage
you with this think about this for me as
the sole proprietor the average sole
proprietor in the United States of
America pays about 53 percent of taxes
as you could see right there in fact let
me go ahead and switch over here and a
corporation currently pays about 22 to
23 percent in taxes so that's a huge
savings when you incorporate in fact I
want to show you these savings by
looking over here let's say in 2020 next
year you made $100,000 right as a sole
proprietor you're going to pay fifty
three thousand dollars in taxes and
you're going to earn forty seven
thousand dollars of that to take home
and pay yourself right now it's a
corporation you're gonna pay $22,000 and
then you're going to earn seventy eight
thousand dollars meaning that's a
$31,000 difference so just by
incorporating before you get your
contract your slice
I'm saving you $31,000 here in taxes and
2030 dollars here by not having to redo
these things that you need to in order
to make your license qualify the
corporation so ladies and gentlemen it's
pretty simple it's pretty easy we're
running an end-of-the-year special so I
want to encourage you to get
incorporated as soon as possible will
help you will actually walk you through
step by step you don't do anything you
simply we gather a couple pieces of
information from you and that's it we go
to town make it happen all right guys we
look forward to helping you out we look
forward to servicing again Allen
contractors state licensing school with
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