<<I friend of mine and I want to start a Internet based business ... we don't envision earning any money via this business for at least several years, but will need to invest some of our regular monthly income in infrastructure and services ... ownership and areas of responsibility are an issue so instead of just shaking hands on it we wanted something more formal ... furthermore, we don't expect to have anybody else involved in the operation ... so, LLC or S Corp? (or C Corp?)>>

That is always the question...what type of organization would be best. And it's impossible to really respond here. It would take more space than we really have. Each has plusses and minuses.

<< ... what implications does either have on Taxes ... if we have regular bimonthly income from our day jobs, from which we have withholding, do we also have to file quarterly tax statements (Form 1165?) in addition on behalf of the Corp (LLC)? ... the Idiot's Guide to Taxes doesn't help with this as far as i can tell and I didn't see it in the FAQ ... what about deductions? ... I'm assuming we can deduct our expenses on hardware, meetings, related travel, etc... depreciate physical assets over 5 or 3 years etc... Thanks in advance for your help>>

Really, the only help that you'll receive on this issue is with a qualified tax pro. I answer these question many times, but it always requires getting ALL of the members of the organization together and reviewing their personal situations in addition to the corporation situation. It's not an easy process.

So, unless you want to visit your local library or bookstore and check out the various books that compare and contrast the various organization types, you'll really be stuck with making an appointment with a qualified tax pro.

TMF Taxes
Roy