I’ve been giving the whole voiceover-business-incorporating question some thought.
I see that question online almost every day and it’s become even more pressing for many voice talents ever since the new tax code passed. For a long time I have held that most voice talents are incorporating for two reasons:
Because somebody who knows nothing about the voiceover industry tells them to
It makes them feel professional and/or important
Clearly, neither of those are good reasons. I’m also sick & tired of seeing new voice talents asking the same questions over and over and over when all of the information is already out there. See my rant from a few weeks ago. With that in mind, here is an incorporating Q&A. A big thanks to Rob Sciglimpaglia and Hal Peterson who spoke at APAC 2018 for their new and insightful data. While I won’t relay all of the info they shared (it was a panel that people paid good money to attend), I will fold in some of their insights into what I already know.
Q: What is a corporation?
A: For the purposes of this conversation, a corporation is an entity designed to protect your personal assets in case bad things happen to your business.
Q: Why does a voice talent’s business need incorporating anyway?
A: Because sole proprietors have zero legal protection in case bad things happen.
Q: What kind of bad things?
A missed deadline as a result of getting sick
A missed deadline as a result of equipment malfunction
Defamation (slander, libel, or both) that damages your reputation
Q: Why not just get liability insurance and not bother with incorporating?
A: You should do that anyway!
Q: Do you recommend an income level before incorporating?
A: While having legal protection of your voiceover business is probably a good idea regardless of your income, earning $75,000 and up is more realistic. If you earn $150,000-$200,000+ I’d say it’s absolutely necessary.
Q: I should incorporate because I’m non-union and SAG-AFTRA won’t protect me, right?
A: Your union status should have no influence on whether and how you incorporate.
Q: If I incorporate, which one should I choose?
A: I can’t answer that because I don’t know where you live or your financial situation. I can tell you the types of corporations that pertain to voice talent, though:
C Corp: a corporation that is taxed separately from its owners
S Corp: a corporation that reports income & losses on their personal tax returns and are taxed as an individual
Limited Liability Company (LLC) Single Member: an LLC in which a single individual or other entity owns all of the LLC ownership interest
Limited Liability Company (LLC) Partnership: an LLC where the members of the company cannot be held personally liable for the company’s debts or liabilities
FYI LLC’s are NOT corporations, but most of us don’t know the difference anyway and mix up all the terminology.
Q: What’s this 20% business deduction thing in the new tax code?
A: The 20% business deduction applies to sole proprietors, LLCs, and s corps. Narrators will be able to take advantage of it up to $157,000 in income. If you are considering incorporating, the biggest benefit of doing it now is the 20% deduction.
Q: So…I should incorporate, right?
A: I have no freaking idea.
TIP OF THE WEEK
It’s the same tip I give almost every week: DO YOUR RESEARCH. Don’t let a bunch of ill-informed yahoos on a Facebook group tell you to incorporate or not. If you are going to incorporate or not incorporate, do it for the right reasons.
If you are considering incorporating, talk to both your CPA and Rob Sciglimpaglia before you make a decision. If you want more information about how to form an LLC in your state, check out www.llcuniversity.com.
NEWS AND NOTES
Thursday, July 12th @8PM EST: my next Edge Studio “Business and Money 201” webinar topic will be ‘Cost/Benefit Analysis’. We’ll talk about how to determine which genre is bringing in the most (or least) dough and how it happened. Click here to sign up.
Thursday, July 19th @8PM EST: my next Edge Studio “Marketing 201” webinar topic will be ‘The Sales Funnel’. We’re going to talk about what that is and how to push voice seekers through it. Click here to sign up.
Sunday, July 22nd @12:00PM EST: At Arts On Site, veteran voice talent an SAG-AFTRA expert Melissa Exelberth and I will host an Abacus Entertainment Union/Non-Union Q&A. This won’t be a “which is better” conversation! We will talk about the pros and cons of being union, non-union, and fi-core to help you determine which is right for you at this point in your voiceover career.
The Q&A fee is only $50 but if you become an Abacus Entertainment Studio Member you get 50% off! The newly updated Studio Membership program has a ton of great benefits: check it out at https://www.abacus.nyc/studio-member-signup. FYI this is an in-person only event and seating is limited. Click here to sign up!
November 9-11: MAVO is coming! I will be one of the guest speakers and it’s going to be a blast. They just announced that one of the guest speaks will be none other than Joe Cipriano! Be sure to get your tickets now while you still can. Learn more at MidatlanticVO.com!
HAPPY HAPPYS
Happy Spareribs Day and I Forgot Day! I have a great joke about I Forgot Day but I can’t remember what it is…
QUOTE OF THE WEEK
From my village to yours; this is Tom Dheere, The H is Silent, but I’m Not.
Tom Dheere is a 20+year veteran of the voice over industry who has narrated thousands of projects for hundreds of clients in over a dozen countries. He is also a voiceover business and marketing consultant known as the Voice Over Strategist and is currently producing the comic book “Agent 1.22”.
Photo by JBrazito
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