So simply put I am considering starting a small business as a strategy to supplement my income and for possible tax advantages (if they exist). Outside of my main career I posses skills in areas that I think are of demand today. So simply put, my business idea consists of computer/electronic repair + service, ie, computer repair/maintenance both on the software and hardware level, small electronics repairs, computer custom builds, and home theater setups and installations. These are things that I am simply good at and posses a high level of knowledge in.
My question pertains to what type of business I should make this based on the details provided below:
- My spouse and I both presently have career jobs
- I would start this business out of my home (initially anyway)
- I will be the sole employee with possibly my spouse doing administrative work/book keeping
- I currently make $105k/yr
Startup would involve modest costs since I already have a perfect office and equipment for doing these things (it's always been a hobby of mine).
So how should I be looking at this in terms of type of business? Should I be doing it as a 'proprietorship' vs 'corporation'? From what I understand the biggest difference between the 2 is how income from this business is taxed. As a proprietorship its simply added to my current income and taxed in it's appropriate bracket where as corporation, vaguely described, is treated as a separate entity and taxed independently but at lower 'business' brackets. Are there other things that are important to consider between the two in my case?