As an entrepreneur, one of the most important decisions you’ll make is what type of structure your business will have. Depending on your selection, the model will affect your business tax obligations differently. Start your search with the small business services team at ATAX. These tax preparation specialists will put you on the path to choosing the right structure for your company.
Here are a few of the most common arrangements to consider, along with their tax implications:
- Corporations: There are two types of models: S corporations and C corporations. With S corporations, shareholders tend to pay individual taxes. For this structure, businesses are required to have a single class of stock and less than 100 shareholders. The C corporation typically allows for more business expense deductions. However, annual earnings and shareholder dividend distributions may also be taxed. The tax preparation specialists at ATAX will gladly discuss which structure is more beneficial for your business.
- Limited Liability Company: Commonly known as LLCs, these structures create legal protections against business debts. An LLC is not taxed on annual earnings and dividends and business owners can make quarterly payments on their personal tax forms. Ask the business tax professionals at ATAX about other tax requirements, including property and self-employment taxes.
- Partnerships: Owned and operated by two or more people, partnerships have
several tax benefits and disadvantages based on the structure type. Generally,
some models are not subject to corporate tax rates, while others offer personal
liability protection. The tax return experts at ATAX will help you to determine which partnership model will work best for your business.
- Sole Proprietorship: This type of model is owned and operated by one individual and is generally the easiest structure to set up. In addition to having to pay self-employment taxes, any lawsuits filed against the business can be taken from personal assets. Be sure to talk with the tax preparation team at ATAX about the other tax benefits and liabilities of having a sole proprietorship.
Let ATAX help you take the guesswork out of forming the right structure for your business. For an appointment, call the firm today at (914) 920-5060 or visit the website to fill out their convenient contact form.