On this episode of 2 Frugal Dudes, we’re talking all about the process of incorporating this podcast and making it into an official business. Don’t forget that you can get the replay videos of FI Summit here! Stay tuned for our next summit in the fall! CHA-CHING!
Why We Incorporated
2 Frugal Dudes is officially a business. After two years, what started as a side project is now an incorporated entity.
For Kevin, who is in the startup world, the philosophy is to focus on developing a product before making things official. Eventually though, once you have proof of the concept, you need to make things official to be able to scale and grow.
Up until this point, 2 Frugal Dudes hasn’t had sponsors and has been a low-cost endeavor. All expenses were covered by Sean and Kevin. With FI Summit, however, things changed. As the first revenue-generating endeavor, FI Summit made things more complex. It was time to start treating the podcast like a business– tracking revenue and expenses, filing taxes, etc.
How to Incorporate
Incorporating a business is costly, but relatively easy to manage. It can be done with the assistance of an accountant, a lawyer or even managed individually by using the forms online.
In Kevin’s experience, working with an accountant has been more effective than working with a lawyer when incorporating. The accountant is in the best position to tell you how the various types of incorporations (s-corp, c-corp, LLC) will impact your taxes.
Where Our Money Went
Kevin’s money went toward taxes. Personal taxes, business taxes, non-profit taxes, taxes for days. As Kevin has mentioned before, he uses an accountant to keep his various organizations in line.
Sean’s just went on a work trip to Charlotte, which was covered by his employer, so actually had a positive impact on his budget.