501c3

Teresa said: Mar 25, 2013
Teresa Skinner
Suzuki Association Member
Violin, Viola
69 posts

Does anyone have a 501c3 for their studio? If so I’d appreciate suggestions on how to set one up for my own studio.
Thanks!

…if you listen to the music, it tells you what to do…

Paula Bird said: Mar 25, 2013
 
Suzuki Association Member
Violin, Piano, Viola
Wimberley, TX
386 posts

501(c)(3) is the IRS statue for nonprofit corporations. If you are running a business, you would not want this status. It would mean that you weren’t supposed to be making a profit. Now, if you are part of an educational institution, there might be some need.

If you are thinking about incorporating yourself, you would set up a regular corporation and then pay yourself as an employee of the corporation. But, you individually and the corporation would be taxed. It’s called “double taxation,” which is an argument against doing this. People set up corporations in general to have shelter from liabilities. In the case of studio teachers, it makes better sense for us to be sole proprietors and make sure we have appropriate protective insurance if necessary.

Paula E. Bird
TX State University
Wildflower Suzuki Studio
http://teachsuzuki.blogspot.com (blog)
http://teachsuzuki.com (podcast)

Wendy Caron Zohar said: Mar 26, 2013
Wendy Caron Zohar
Suzuki Association Member
Violin, Viola
Ann Arbor, MI
94 posts

What about the virtue of setting up one’s studio as an LLC (limited liability company) for a sole proprietorship? Attorneys do this routinely to protect themselves and personal assets against suits deriving from their services … from… whatever.

Wendy Caron Zohar

Michelle McManus Welch said: Mar 27, 2013
 
Suzuki Association Member
Violin, Viola
Lindenhurst, IL
42 posts

Go to a good accountant. It’s important to get the correct papers filed and to get a corporation set up for you that meets your needs. Generally, an “S” corp is what you need if you are a sole proprietor (only you) and even if you had a few employees. This gives you protections against lawsuits that would wipe out your personal assets as well as business. I suspect you are waning to make money? Again, as others have mentioned, the 503c would not be appropriate for this. Ask around to find someone reputable who has experience in this!

Michelle Mc Manus Welch

Teresa said: Mar 27, 2013
Teresa Skinner
Suzuki Association Member
Violin, Viola
69 posts

Thanks everyone for your insights. Much appreciated! Keep ‘em coming!
Teresa

…if you listen to the music, it tells you what to do…

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