I have a company where I am the sole owner, the business is service oriented, we do energy calculations for new buildings in the state of California only. Our customers are architects, designers, and contractors in California. I have a partner who is a 1099 independent contractor. The partner does most of the calculations (75% to date). My main role is sales, marketing, accounting. I currently own no real estate but as this business grows that is where I will be putting my profits. This is a new business started Jan 2005, estimated gross sales this year will be around $60,000. My goal is to have the best tax shelter, short term goals are being able to purchase a new car using the corporation and writing off health insurance benefits.
I have 2 different views I have read: 1) Service Organizations like Architects and the like, cannot be C Corps. 2) If I have my spouse as a 6% shareholder and she does not participate in the business I can qualify as a C Corp. Which business entity would be best for me? Are the benefits worth it for incorporating in Nevada or Wyoming if my customers are 100% in California?
I have 2 different views I have read: 1) Service Organizations like Architects and the like, cannot be C Corps. 2) If I have my spouse as a 6% shareholder and she does not participate in the business I can qualify as a C Corp. Which business entity would be best for me? Are the benefits worth it for incorporating in Nevada or Wyoming if my customers are 100% in California?