Greetings my new friends!
First of all, I plan to open a small, TO-GO restaurant (~1000 sq. feet-will be leasing) and sell a limited menu selection. I will own 100% of the business (no partners or other investors, only myself) and have between 6 and 12 employees. I will not be using any financing as I will pay for the restaurant with 100% of my own personal money.
Net Income should be between $45K - $85K each year after the first full year.
This small restaurant will cost under $100K for EVERYTHING.
The equipment shouldn`t be over $45K.
QUESTION 1: Should I form this business as a LLC or S-Corp and why?
QUESTION 2: I would like to use SECTION 179 to write-off all of the equipment I purchase this year. I want to do this because I will have over $80K in earned income from another job this year.
I want to offset this income in 2006 since I will not make this much next year in 2007. This makes the most sense and will save me A LOT in taxes if I can do a Section 179 this year. I have read that the equipment has to be "placed in service" in the year of the write-off ... even if it is the last day of the year. Can I do this with both a LLC and S-Corp and do I actually have to "USE" the equipment or simply purchase it and place it in my "soon to be open" store? My concern is that term "placed in service." Do I actually have to "use" the equipment this year to use the Section 179 or do I only have to purchase the equipment this year. I might not be officially open to the public before Dec. 31 of this year ... it might be the middle of January 2007 before I can be "open." The Section 179 would work great this year since I will still have a Net Profit/Income "overall" even after the Section 179.
Thanks again for your help and advice. I look forward to hearing from EVERYONE!