jmalloc[at]yahoo.com (John Ashbil Malloc) writes:

- quote -

Incorporating won't help your situation 'n' it's a little
late for planning. You'll be reporting the income on
Schedule C (Form 1040) "Profit or Loss from Business" and
expenses will be deducted to bring you to the bottom line.
You'll also have to pay self-employment tax on your net
profits.

Fortunately, there is time to plan ahead. Sit down with a
tax professional NOW, to see if you can find ways to reduce
your taxable income and report expenses you may be
overlooking.

Good Luck!!=

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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- quote -

He is right and you have a problem.

- quote -

Nope.

Helen, EA in PA
50 miles, 3 days, 1 cause - Multiple Sclerosis Challenge Walk for the Cure
October 1 to October 3, 2004
Donate on-line at www.msandyou.org

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A company recently licensed a piece of software I wrote. The
duration of the license term is 10 years. Rather than paying
every year ($10K) they paid the whole thing in one shot
($100K). I was very happy until a friend of mine told me
that I need to pay taxes on the whole thing by next April.
Is he right? If he is, is there a way to distribute the
taxes to 10 years rather then paying once?

I'm doomed if I need to pay taxes on the whole thing because
I will incur additional expenses (mostly support) the
following years and I wont have income to deduct these
against.

Since they alreay paid, is there an advantage in
incorporating now?

-John

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