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It really depends on where you are located and what you are doing. Is there a reason you want to incorporate instead of registering as an LLC (i.e. are you going to be seeking investment any time soon)? At the risk of being unpopular (judging by the other comments), I would advise you to go do it now. It's not that difficult, and you will have to learn how to do it eventually. Furthermore, if you are really planning for your startup to go anywhere, things are most certainly not going to slow down. In fact, your time will just become more and more valuable, so right now would be the smartest time to incorporate. If you are not yet making money, then that means your taxes won't be that difficult to file anyway. If you are making money, you are suppose to be claiming that on your taxes, whether you're incorporated or not. Either way, you can at least legally cover your personal ass(ets). Keep in mind that my thoughts are based on procedures and tax law in MI, so if there is some mysterious overhead in your state that differs from MI, then you must take that into consideration. So, I guess my suggestion is:
If there is a good chance your startup will flop and fail within the tax year, and not get sued in the process, don't bother. But if you are serious about it and believe it has potential to grow, why not do it now? |