Hire myself for my rehab?

Question

I recently started a home improvement company - albeit mostly to get my sparsely-employed-as-of-late-contractor-boyfriend off the couch..( He is great at what he does, not so at sales, marketing, follow up, paperwork, keeping books, which I am now handling, along with some light assistance to actual physical work)...Anyway I'm starting my first rehab shortly and was planning to just do the work (it's a light job) between he, I and maybe another guy we know. But now I'm wondering - would there be some advantage to hiring my own company to do this work and getting it all on the books? Any plus or negative in that? At tax time even? Or am I better off without?

Ryan Webber · Answer

I would always factor your numbers as if you had to contract it out.  If you are doing it yourself then you will make that much more (hopefully). :D

N/A N/A · Answer

I should have been a little more specific. The actions like bookkeeping is what i reccommended paying for. I work on the rehab that me and a friend currently are doing. there's about 4 of us and all we have is the kitchen and were done wtih the home. it's awsome it's only been about 1month. but we worked late. basically i just weigh the cost of doing it myself against the cost of paying someone. i believe my uncle once paid $50 for someone to do his books and he said it just relieves some stress not having to worry about it..

N/A N/A · Answer

What if the margin on a deal is slim and the only way to cut costs and up profits is by taking on some of the work - would you advise against that?

Minna Reid · Answer

I did price the work hiring it all out, but will probably be doing some myself. The rest will be between my bf (who's a contractor) and his buddy. I will certainly save some money that way, but I think pricing the deal without considering the cost of hiring all the work out is a mistake. And after all, your time is money too.

N/A N/A · Answer

Just a small recommendation, dont try to do everything yourself. Use other peoples time. It doesnt hurt to look to see how much someone will do it for you. May save you alot of headaches in the head and you'll have more time to spend on other things

Matt H · Answer

That would be a disadvantage if you already have the man power to do it yourself. You'll pay way too much for the rehab and have no profit left over.

Ryan Webber · Answer

An LLC is a flow through entity.  All the profits or losses of the LLC flow through to your personal tax returns.  So, no, there are no tax benefits to giving the profit to yourself through an LLC.

Now in some instances you may need a separate entity to do the work (i.e. federal grant programs; but you can't legally make a profit from those either).

Minna Reid · Answer

But if I am an LLC this would be the way to go?