365 - Debunking the Legal and Tax Advice You See on Social Media
On today's episode of the podcast I'm talking about terrible advice I see on the internet and how to avoid it.
Next Thursday, December 5th, I'm hosting two workshops - "Legally Launched" and "6-Figure Tax Blueprint," tailored to your needs as a business owner. You'll leave with the core takeaways you need to take action after the workshop. Learn more about which one is right for you and register for the workshop(s) at notavglaw.com/masterclass
I'm only sharing 10 of the terrible pieces of advice I often see on the Internet, but I could have made this a multi-part episode.
1. Don't form an LLC until you hit $30,000 in revenue. - I hear lots of mythical revenue markers but there's no magic number because LLCs provide liability protection at any revenue. The more money you make, the more liability you're likely open to because you're more working with more clients which can lead to more problems. The longer you wait the more hassle it is to form an LLC.
2. Form an S Corp right away. - When you form an S Corp you are legally required to put yourself on payroll, pay yourself a reasonable recurring salary, and have profit leftover in your business which you can't do if you aren't making money when you start right away. We'll dive into this deeper on the 6-Figure Tax Blueprint workshop.
3. Just use LegalZoom. - I'm not a huge fan for many reasons including lack of added benefits. They ask you questions to fill out a form you can fill out for free yourself online. They charge you to get an EIN when you get your EIN for free on the IRS website.
4. Just do it yourself. - If you scroll through social media I frequently see people say "use LegalZoom" or "do it yourself" or "go work with a lawyer." I suggest somewhere in-between. The problem with doing it yourself is we've seen clients who did it incorrectly. Once you file, you need to maintain your LLC compliance requirements including back franchise taxes. I believe in a well-rounded approach of doing it yourself, with guidance which is why I started creating courses.
5. You don't need trademarks. - This is kind of like telling someone you don't need health insurance. You hope you'll never need to enforce it, but if you need to use it and don't have it, it's a problem.
6. Trademark everything. - It depends on who you are as a business owner and what you're launching.
7. Don't trust templates. - The person who writes the contract template understands your industry, your business, and these templates are typically based on contracts they've custom written for clients.
8. You don't need to do that. - This can refer to a lot of things, but I see it often with things like BOI (Beneficial Information Ownership reports), testimonial requirements, website compliance, etc. Too often people think these laws are for big corporations like Amazon or Target and not small businesses like us, but we see it happen to small businesses all the time.
9. Just write it off. - Not everything is a tax deduction! You need to be using it for business. And writing it off doesn't make it free. Focus on buying things that have a high ROI.
10. You can pay $0 in taxes. - Not every strategy is helpful, even if it's not fraudulent. You may end up owing more in the long run and all tips don't apply to all businesses.
Register for our December 5th workshop(s) at notavglaw.com/masterclass