Assignment fees and IRS- self employed,2nd income???

[Tamarra Banks]

How do u classify your assignment fees as income? do you have an llc or get checks written in your name? Ive already had a horrible experience with IRS after winning a vacations prize not knowing it would be added as income and i ended up owing big time. Im just starting to actively pursue deals and dont want taxes to eat me alive,lol

Tamarra

[Ryan Webber]

Its going to be ordinary income.

There are some tax advantages to how you can set up your company's payments to you (paying yourself a "reasonable" salary which is taxed as ordinary income and then disbursements above that are not taxed as ordinary income). Talking to your accountant about all that is a really good step before you set up an LLC or other entity.

If you have an LLC then do the contracts and checks in your LLC's name for liability. If you don't, then just get them in your own name.

BUT . . .Let's do a reality check here, though. Unless you have significant personal assets that you need to protect from business liability, the last thing you need to be worrying about as a new wholesaler is setting up an LLC. Focus on doing something so that you can owe the IRS money first.

This is really one of those "1,000,000 Seemingly Important But Really Nonessential Things Newbies Stay Up Late At Night Worrying About Before They Actually Do A Deal" questions. The problem with focusing on 1 of those "1,000,000 Seemingly Important But Really Nonessential Things Newbies Stay Up Late At Night Worrying About Before They Actually Do A Deal" questions is that you have an extremely limited amount of energy/time/money/effort to put into your new business. If you spend that precious little energy/time/money/effort on 1 of those "1,000,000 Seemingly Important But Really Nonessential Things Newbies Stay Up Late At Night Worrying About Before They Actually Do A Deal" questions then you are dramatically decreasing the odds that you will put enough of your energy/time/money/effort into one of the "Very Few Essential Things Newbies Need To Do To Get A Deal" things that will actually bring you success in this business.

You need to become a psycho jealous husband with your energy/time/money/effort when you first get in this business. The odds of you actually succeeding long term in this business are so slim that unless you become an absolute maniac with figuring out and DOING the "Very Few Essential Things Newbies Need To Do To Get A Deal" then I am so sorry, but you will fail in this business.

Prioritize what you need to be spending your precious limited resources on, and get psycho jealous husband with it. That's your only real chance for success in this business.