Beruflich Dokumente
Kultur Dokumente
In the United States there are two tax systems. One for the poor and uneducated Make Money ? Pay Taxes ?Spend Money One for the wealthy and educated Make Money ?Spend Money ?Pay Taxes
-Loral Langemeier Author of the Millionaire Maker The greatest benefits of incorporation are the tax savings and shield of liability provided by such entities. Most Americans overpay ridiculous amounts of money in taxes every year simply because they are uninformed as to the benefits of entity formation, and specifically incorporation.
$HAT ARE THE BENEFITS OF INCORPORATION AN+ $H, SHO-*+ ,O- INCORPORATE ,O-RSE*F(
?? *imited *ia%ilit' o A orporation is deemed a separate entity, meaning it is its o!n individual and its assets and liabilities are separate than those of the o!ners, also kno!n as the shareholders. ??"n order to maintain this separateness, you must# ?? $ave a separate corporate bank account and not commingle your assets. o E.am&le ! H!w This Bene its ,!u# %ou are not liable for the business debts or liabilities. Meaning if you are sued for negligence arising out of your profession, they cannot come after your personal assets &home, bank accounts, car, etc'. ?? Ta. Sa/in"s o There are approximately ()* allo!able expense deductions for + corporations , point is to try to -ero out the corporation and minimi-e taxable income. .urther, '!u d! n!t &a' sel 0 em&l!'ment ta., and can get creative !ith income and distributions/ ??0xamples# ?? "nsurance1 ?? $ome 2ffice1 ?? Travel3Mileage 0xpenses1 ?? 4usiness 0ntertainment 0xpenses
o 0x# Take client out to lunch ?? osts of doing business o 4usiness cards, advertisement
$HAT ARE THE +IFFERENCES BET$EEN A C0 CORPORATION) AN S0CORPORATION AN+ A *IMITE+ *IABI*IT, COMPAN,(
??
?? S C!r&!rati!n orporations, !hich like sole proprietorships and partnerships, are pass-through entities. That is, there is no .ederal income tax levied at the corporate level. "nstead, an +-corporation5s profit is allocated to its shareholder&s' and taxed at the shareholder level. . ?? Cl!se C!r&!rati!n - +mall privately held corporation that allo!s you to skip the formalities re6uired of general corporations, such as annual meetings and documented minutes o 7esignated as 8 lose orporation9 in the Articles of "ncorporation that are filed !ith the +ecretary of +tate ?? *imited *ia%ilit' C!m&an' - An LL a hybrid business entity that is treated like a corporation in terms of limited liability and like a partnership in terms of taxation. An LL , although a business entity, is a type of unincorporated association and is not a corporation. o :enerally used to purchase real estate
S0 CORPORATION O1ER1IE$
?? 0lecting to be taxed under the provisions of +ubchapter + of hapter ( of the "nternal ;evenue ode allo!s the corporation to avoid paying taxes directly on its profit, but rather to pass the profit and losses on to the shareholders !ho pay the taxes on their individual income taxes , <ust like partnership taxation. + orporations are limited to corporations !ith less than a specific number of shareholders. o This designation is made !ith ";+ .orm =))> o An +-corporation5s annual tax return is filed on .orm ((=*+ that consists of# A section detailing revenues, a section detailing expenses, and a section for calculating the amount of tax o!ed.
o "n addition to the above, .orm ((=*+ also includes a +chedule
? as !ell as a +chedule ?-( to be filled out for each shareholder. The +chedule ? and +chedules ?-( are used to sho! ho! the business5s profit or loss is allocated among the o!ners.
?? Average Tax +avings is at least @A,*** a year/ ?? 4e
areful , Although + corporations fle! under the radar for 6uite some time, the ";+ is no! becoming more aggressive.
o .or example# The ";+ holds that shareholder- employees !ill be
allo!ed the deduction for health insurance premiums only if the +- orporation establishes the health insurance plan and purchases the coverage. +hareholder-employees !ho purchase coverage under their o!n name cannot use the above- the-line deduction, but can still include the premiums as an itemi-ed deduction, sub<ect to the limitations on medical expenses.
o ;etain a kno!ledgeable
BA
o 4ecause you are individual, a lose + orporation !ill be the best corporate structure for you based on the circumstances. o Many small-business o!ners prefer the 8 lose orporation9 because they find the benefit of not having to comply !ith corporate formalities invaluable. "n essence, a close corporation is a corporation !hose shareholders and directors are entitled to operate much like a partnership.
??7on5t need to have yearly shareholder5s meeting and
to benefit from the partnership taxation and allo! the o!ners to pass through all of the losses individually.
o
%ou can benefit from the limited liability shield !hile receiving advantageous expense deductions and tax treatment.
orporation must file 6uarterly and annual payroll tax returnsGeven if the only employee is the o!ner. "t must also pay federal unemployment tax on the o!ner5s salary. return must be prepared by an enrolled agent, BA or other tax professional.
LAW OFFICES OF ADELA Z. ULLOA, APC BENEFITS OF INCORPORATION -5-
L0T T$0 LAH 2.." 0+ 2. A70LA I. JLL2A, AB "C 2;B2;AT0 %2J ;":$T C2H/
The @(>)*.** attorney5s fees !ill include the follo!ing, as !ell as all associated filing fees#
?? Articles ! Inc!r&!rati!n, designating you as a 8 lose orporation9 and filed !ith the +ecretary of +tate1 ?? B'laws, specifically prepared for your corporation !hich designate the rights and po!ers of the shareholders, directors and officers1 ?? Statement ! In !rmati!n, prepared and filed on your behalf !ith the +ecretary of +tate1 ?? Federal Ta. Id Num%er A&&licati!n, filed !ith the ";+ on your behalf. ?? IRS F!rm 4556, designating your corporation as an + corporation for taxation purposes and filed !ith the ";+1
?? 7uic8 In Pers!n Filin" , :enerally takes over a month
to send and receive filed Articles, but our office !ill file them in person !ith the +ecretary of +tate thereby reducing the process time.