|
|
|
How Much Do You Need To Earn Per Hour To Achieve Your Yearly Financial Goals
Have you ever asked yourself what your highest income producing activity is? If you’re like most people you probably go about your day-to-day business never really thinking about the moment to moment activities that consume your day. I’d like to...
Managing Stress - Hire the Right People
Managing stress is not easy if you don't have the right people in your business or team.
One of the biggest challenges any business owner or manager has is hiring the right people.
I've recently discovered a simple, inexpensive yet very...
Survival Tips For Small Businesses
You may be in Mail Order, Direct Mail or you may be a local merchant with 150 employees; whichever, however or whatever you’ve got to know how is to keep your business alive during economic recessions. Anytime the cash flow in a business, large...
The Basics of Borrowing Money to Start A Business
Are you thinking about starting a business but have no money to do it with? Well, you're not alone. This article will tell you the basics of borrowing money.
A loan is money that is borrowed, and has to be paid back along with interest. If...
The Challenges of Human Resource Management
Introduction
The role of the Human Resource Manager is evolving with the change in competitive market environment and the realization that Human Resource Management must play a more strategic role in the success of an organization....
|
|
| |
|
|
|
|
|
|
How To Avoid Double Taxation Of Your Small Business Profits
Have you been thinking about incorporating your small business
or self-employment activity? The advantages are many!
For starters, you'll be protecting yourself and your family from
the possibility of a business ending lawsuit. Forming a
corporation is Step One on the path known as "Asset Protection"
-- you are moving from the world of unlimited liability to the
world of limited liability.
(NOTE: For further insight into the legal advantages of
incorporating, check out the article: "It Can Happen To You: Why
Any Sole Proprietorship Is A Risky Business" at http://www.
YouSaveOnTaxes.com/happen-to-you.html)
From a tax standpoint, there are both advantages and
disadvantages to incorporating. Yes, forming a corporation can
either reduce your taxes or increase your taxes, depending on
what type of corporation you create.
There are two main types of corporations: "C" Corporations and
"S" Corporations -- and which type you choose can make all the
difference in the world of taxes.
NOTE: The question of "C" Corp vs. "S" Corp has no effect on the
asset protection provided by your corporation. This is a tax
issue, not a legal issue.
A "C" Corporation can lead you into a Tax Trap known as "double
taxation". Yes, income from a "C" Corporation can actually be
taxed twice -- once when it's earned on the corporate level and
again when it's paid to you, the shareholder, in dividends.
There are several ways to avoid double taxation. Often the
easiest way is to tell the IRS that you choose to be an "S" Corp
instead of a "C" Corp. The profits of an "S" Corp are not
taxable to the corporation; instead, those profits are reported
directly on the shareholder's personal income tax return and are
therefore only taxed once.
And once is enough, don't you think!
Of course, any article on
Choice of Entity must contain the old
disclaimer, "Consult your tax professional" -- I am not
prescribing a one-size-fits-all approach to this issue. But for
many small biz owners and self-employed folks, the "S"
Corporation is a good fit because it provides protection from
personal liability and avoids the nasty tax trap of double
taxation -- two great benefits worth checking into.
Should you incoporate your sole proprietorship and then decide
that the "S" Corporation is the right fit, you must inform the
IRS that your corporation is choosing "S" Corporation status by
filing Form 2553, which is, in effect, an application to become
an "S" Corporation.
IMPORTANT:
If you incorporate and do not file Form 2553, you are
automatically considered to be a "C" Corporation by the IRS. In
other words, to be a "C" Corporation, you just incorporate;
there is nothing you have to do to inform the IRS you want to be
a "C" Corporation.
There are critical rules regarding how and when to file Form
2553, so be sure to read the instructions carefully, or check
with your tax pro.
Failure to file Form 2553 on time or filing Form 2553
incorrectly results in a rejection of your corporation's "S"
Corp application, and the corporation is then by default treated
as a "C" Corp, subject to double taxation, the very trap you
were trying to avoid.
To download a copy of Form 2553, go to: http://www.irs.gov/
pub/irs-pdf/f2553.pdf
The instructions for filing Form 2553 are found here: http://www.irs.gov/
pub/irs-pdf/i2553.pdf
About the author:
Wayne M. Davies is author of 3 tax-slashing eBooks for small
business owners and the self-employed. For a free copy of
Wayne's 25-page report, "How To Instantly Double Your
Deductions" visit http://www.YouSaveOnTaxes.com
|
|
|
|
|
| United States Small Business Administration |
| An electronic gateway of procurement information for and about small businesses. Search engine for contracting officers, marketing tool for small firms, ... |
| www.sba.gov |
|
| SBA |
| The Small Business Planner includes information and resources that will help you at any stage of the business lifecycle. ... |
| www.sba.gov |
|
| Main Page - SmallBusiness.com - Small Business Resources |
| Find Small Business plans, advice, tutorials about organization, corporations, entrepreneurship, and smallbusiness. |
| www.smallbusiness.com |
|
| Yahoo! Small Business: Domain Names, Web Hosting, E-commerce ... |
| Yahoo! Small Business provides products and services that enable you to establish and grow your business on the Internet. Services include domain name ... |
| smallbusiness.yahoo.com |
|
| Small business advice business start up small business finance ... |
| business start up small business finance start up advice. |
| www.smallbusiness.co.uk |
|
| Smallbusiness.gov.au redirect to business.gov.au |
| Business Entry Point - Helping small business in big ways. An Australian Government initiative. The content from this website has now been consolidated into ... |
| www.smallbusiness.gov.au |
|
| Business & Small Business |
| Online and print small business publication. Information to help start, grow or manage a small business. |
| www.entrepreneur.com |
|
| Microsoft Small Business Center |
| Your home for information about Microsoft's small-business products and services, tailored business advice, technology tools, and more. |
| www.microsoft.com |
|
| The Small Business Advisor - advice for starting and operating a ... |
| Advice and assistance for starting and operating a small or home based business. |
| www.isquare.com |
|
| SCORE "Counselors to America's Small Business" |
| A nonprofit association dedicated to encouraging the formation, growth, and success of small business nationwide through counseling and mentor programs. |
| www.score.org |
|
| Small Business and Self-Employed One-Stop Resource |
| IR-2006-2, January 3, 2006 - Temporary and proposed regulations will significantly reduce tax filing burden for nearly 950000 small business owners. ... |
| www.irs.gov |
|
| Welcome to Small Business BC your business resource in British ... |
| BC Business Services offers assistance and resources for those running or starting a business in British Columbia and Vancouver. |
| www.smallbusinessbc.ca |
|
| Small Business Service | Home |
| Provides information and advice to help small businesses realise their potential. |
| www.sbs.gov.uk |
|
| NSW Small Business |
| A site developed by the NSW Department of State and Regional Development for small businesses. Topics include management, resources, current issues and ... |
| www.smallbiz.nsw.gov.au |
|
| Business Management & Advice: Small Business Resources & Information |
| Looking for business management and advice? Our website includes small business resources and information that can help you. Visit the small business ... |
| www.businessweek.com |
|
| Small Business Lawyer, Attorney, Law, Legal Help - FindLaw for ... |
| Information and legal sites relevant to small business. |
| smallbusiness.findlaw.com |
|
| Small Business Funding Opportunities (SBIR and STTR) |
| Links to Small Business Funding Opportunities and SBIR / STTR Applications. |
| grants.nih.gov |
|
| Microsoft bCentral Small Business Directory |
| Directory categorized by industry with company business card feature. |
| sbd.bcentral.com |
|
| Our site has moved! Please update your bookmarks! |
| Facilitates the sharing and exchange of information among small business development centers, the small business administration and other business-oriented ... |
| sbdcnet.utsa.edu |
|
| Small Business Development Corporation |
| Our business information services provides guidance to improve business skills and knowledge on advice on starting, buying, selling and expanding a small ... |
| www.sbdc.com.au |
|
|