The Incorporation Gap – Have You Incorporated Your Business?
How many US workers are self-employed? The numbers vary widely. An old Intuit survey estimated that by 2020, 40% of the US workforce would be self-employed. A Washington lobbying group named “It’s My Business” puts the number at 10.3 Million. The Freelancers Union estimates the number to be 42 million and a 2013 study by consulting group MBO Partners estimates the number to be 17.7 million.
No matter what the number is, it’s large. Yet relatively few have incorporated their business activities or taken the necessary steps to benefit from a formal business structure. Assuming the lowest of the above figures as the “pool” of self-employed workers, only about 25% have formalized their business structure and actually file a separate tax return. And if the Washington lobbyists are correct the figure could be as low as 5%.
The primary reason for failing to take the steps to incorporate are based on the mistaken perception that business structures are costly and complex. In truth, the cost of incorporation is well under $1,000 in most cases – a cost which is far outweighed by the benefits. And technology and software developments have more than simplified the requirements for business operation.
Yet the gap between the percentage that are self-employed and the percentage who benefit from incorporation remains substantial. It remains one of the greatest opportunities for a small business owner/self-employed individual. If you’re a freelancer, independent contractor, business owner or in some other way self-employed, it’s time to take the plunge and incorporate! The benefits of doing so are far too great to continue to pass up. The professionals at Nielsen Law Group can assist you in determining what business structure is appropriate and assist you with incorporating your business. Call (480) 888-7111 to schedule your free business formation consult or submit a web request here.