13271: Should You Run Your Creative Career Through A Company Or As An Individual?

Raw transcript:

I was asked a question this morning that
I’d like to share the answer with you to
unexpected answer by the way. The
question was, as a professional
performer, an audiobook narrator, actor,
writer, etc. should I run my business as
an individual or as a company, a
corporation? And the answer is probably
not what you expect. So, let’s talk
about that in this episode of the VO
Heroes podcast.
This question comes up all the time
because we’re always asked when we
create accounts
uh on ACX, on other casting sites, etc.
that end up administering payments.
Do you want to be treated as an
individual for tax purposes or do you
want to be treated as a corporation for
tax purposes? And what is the
information that you have for us in that
way? And the the the the key words there
are for tax purposes. So when this
question is asked,
should I just run my business and get
paid as an employee, as an individual,
or should I run my business and get paid
as a company and invoice uh through the
company? So
the real answer is totally, it depends.
It’s not a yes or no answer. Everybody’s
situation is different.
And it’s really important to get good
advice on this because the difference in
the two can be massive. And depending
upon your personal situation,
it could be advantageous to do one or
the other. Usually what people bring up
is if you set up what in the acting
industry is called a loanout corporation
or any sort of corporate front to do
your work through that you are able to
uh claim things at least here in the
United States. I think it’s the same in
most other countries that that have
income taxes. Um you’re able to claim
certain deductions, certain exemptions,
etc. that you can’t claim as an
individual. Again, if you’re a
corporation as opposed to an individual,
but the real answer here is you’ve got
to get good advice. I’m not a tax
professional. I’m not a tax attorney.
I’m not a a CPA. I’m not an accountant.
I’m not giving you advice on this other
than to talk to a professional about
your situation
and also to on a regular basis assess
your situation cuz it might change.
In general, when people are first
starting off and they don’t have much
work to begin with, the fees around
setting up a corporation legally and it
might be yearly fees with your state
uh or your locality to have a business
license or to have a franchise uh
license. In California, as an example,
as I record this, it’s $800 minimum per
year to have a corporation.
So, and that by the way includes even if
it’s out if the corporate uh structure
is outside California, they have a
foreign license that you have to buy
that’s happens to be $800. So, there’s
fees around that. But when you’re first
starting off, maybe you don’t have
enough income. You don’t have enough
jobs to support that. But as time goes
on, I found this out with me as I got
booked on more and more stuff. it made
all kinds of sense to create a loanout
corporation that loaned me out as a
performer
uh as an individual but through the
corporate structure. So again, I want
you to know I’m not giving you advice to
do one thing or the other because it
totally depends on your personal
situation. How much income you have
coming in, how many jobs you have, what
kind of uh deductions you may be able to
get as a corporate structure would
allow. the the final bottom line advice
is talk to your tax person, talks to
your talk to your CPA, talk to your tax
uh adviser. And if you don’t have one,
uh most creative organizations
have around the beginning part of the
year, maybe the end of the year, they
have usually lowcost or no cost uh
sessions with tax professionals on what
the options are. And you really need
more information. You need to key in on
where you are now. And if you end up
thinking, you know, the best thing to
do, you know, you end up going with
advice, the best thing to do is to stay
as an individual, great. But just stay
on top of it. Keep an eye on what you’re
doing. And as you progress, consider
creating a corporation if that makes
sense. So again, bottom line, I’m not
giving you tax advice. I’m not giving
you corporate creation advice or
individual uh pursuit advice. I’m saying
talk to a professional. It’s well worth
the money to get the advice and support
of somebody who can figure this out for
you where you are now and where you
might be in the future. Okay. All right.
Okay. Okay. Good. Uh I’d love to know
what your your experience has been with
this. Please don’t give advice if you’re
not a tax professional in the comments
below. Here’s here’s the dirty little
secret. I know that professionals won’t
because they have no idea what people
have as an individual situation. So, I
know they won’t. Those of you who are uh
paraprofessionals like I’m not a
professional, but I think I know what
I’m talking about. Please don’t don’t
don’t offer advice, but do discuss what
your experience has been with this
decision between continuing on as an
individual or moving to a corporate
structure and loaning yourself out. Uh,
hit the like button if you like what
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this by forwarding it to another uh
actor or writer or voiceover talent who
might have asked you this in the past.
What do you do? You know, like that kind
of thing. Uh, I’d really appreciate
that. I’m David H. Lawrence the 17th.
Thank you so much for watching and for
listening and I will see you in the next
episode of the VO Heroes podcast.

(from YouTube)