Slashdot Mirror
Shell Companies for Contractors?
dubl-u asks: "What do my fellow freelancers feel about the various shell companies out there? I've got a chunk of work coming up at a place with an especially persnickety contracts department, and I'll probably need to go through a third-party shell company. I used one a couple of years back and they were ok, but there are a lot of them out there, and I'd love to hear about real-world experiences before I sign up. For those unfamiliar with this part of the business, it goes like this: I find my own work; the shell company hires me as an 'employee' and handles my billing and tax withholding for me. Some also 'provide' things like health insurance and 401k plans, although I have to pay for it. You can think of it as outsourcing a lot of the paperwork of being a freelancer. Some outfits, large companies especially, demand this sort of thing."
Be very careful.... I've been working under an S-corp agreement for more than a year now, and there are some tax tricks that only an accountant can help you get to take advantage of being an S-corp. I could NOT fill out the end-of-year tax forms myself as an S-corp (I'm just not tax savvy that way, or interested enough to read and understand all the fine print) so I had to use an accountant, but he made some great suggestions (including deducting part of my apartment rent as office space and advice on buying equipment!) that made it worth the hundreds of dollars I pay him. Unless you're pretty financially geeked, I'd definitely find an accountant and have a serious chat before you go too far.