Tax Tips for Starting a Business; Free Business Structure Wizard

If you're planning on starting a business, the IRS has releases an announcement, which will help you with your business structure.  To receive even more help, you can use the FREE Business Structure Wizard  to help you decide the best business structure which will yield the best tax advantages for you. 

 

Tax Tips if You’re Starting a Business

 

If you plan to start a new business, or you’ve just opened your doors, it is important for you to know your federal tax responsibilities. Here are five basic tips from the IRS that can help you get started.

1. Type of Business. Early on, you will need to decide the type of business you are going to establish. The most common types are sole proprietorship, partnership, corporation, S corporation and Limited Liability Company. Each type reports its business activity on a different federal tax form.

 

2. Types of Taxes. The type of business you run usually determines the type of taxes you pay. The four general types of business taxes are income tax, self-employment tax, employment tax and excise tax.

 

3. Employer Identification Number. A business often needs to get a federal EIN for tax purposes. Check IRS.gov to find out whether you need this number. If you do, you can apply for an EIN online.

 

4. Recordkeeping. Keeping good records will help you when it’s time to file your business tax forms at the end of the year. They help track deductible expenses and support all the items you report on your tax return. Good records will also help you monitor your business’ progress and prepare your financial statements. You may choose any recordkeeping system that clearly shows your income and expenses.

 

5. Accounting Method. Each taxpayer must also use a consistent accounting method, which is a set of rules that determine when to report income and expenses. The most common are the cash method and accrual method. Under the cash method, you normally report income in the year you receive it and deduct expenses in the year you pay them. Under the accrual method, you generally report income in the year you earn it and deduct expenses in the year you incur them. This is true even if you receive the income or pay the expenses in a future year.

For more information, check out the “Business Taxes” page on IRS.gov. From there, review the special section on Starting a Business. Publication 583, Starting a Business and Keeping Records, may also help new business owners with the tax aspects of running a business. The booklet is also available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Additional IRS Resources:

• Business Taxes
• Starting a Business
• Employer ID Numbers (EINs)
• Small Business and Self-Employed Tax Center
• Publication 583, Starting a Business and Keeping Records
• Publication 538, Accounting Periods and Methods

How to Legally Start a New Business for $49, Plus State Filing Fees, Determining the Business Structure

Before you take another step, one of the first things you have to do is decide on what business structure you want for your new business. The FREE Business Structure Wizard at CorpNet can help you decide based on your business goals and the tax benefits you want to take advantage of.

Determining the Business Structure


More importantly than tax benefits, depending on what type of business you are starting, you want to protect yourself and your family from liability. Using the Business Structure Wizard will help you make that decision, which includes legal factors, tax benefits, reporting and business structure.

Sole Proprietorship is usually the cheapest when it comes to paying to have your business taxes completed.  Sole Proprietorship includes your business income and expenses right on to your Form 1040 using a Schedule C.

You can use the FREE Business Structure Wizard to determine the best business structure.

The Business Structure Wizard guides users through a series of basic questions on their business, industry, finances, and long-term plans. The entire wizard should take approximately 5 minutes or less to complete and provides a recommended company structure based on the user's responses.

The wizard includes the following recommended business structures based on the user's responses: LLC (Limited Liability Company), C Corporation, S Corporation, Sole Proprietorship, Partnership, LLP (Limited Liability Partnership), and Non Profit Corporation. Help text provides additional details and explains the significance of each question. In addition, you can find helpful resources on each business structure, and if you'd like CorpNet.com can file and form the recommended business structure for you.

This is not something you want to take lightly. The business structure you select can affect your business in so many ways and is the determining factor in how you will report your business income and expenses to the IRS for the life of the business.  Use the FREE Business Structure Wizard  to determine the best business structure for your business.

 



How to Set Up Your Business, LLC, C Corp, S Corp, LLP, SP, Non Profit

The wizard includes the following recommended business structures based on the user's responses: LLC (Limited Liability Company), C Corporation, S Corporation, Sole Proprietorship, Partnership, LLP (Limited Liability Partnership), and Non Profit Corporation. Click on the invisible image! Choosing a business structure can be a tough decision for the new business owner. You are often in a quandry as to wheher you should incorporate, form an LLC, or simply file a DBA (aka "doing business as filing") and remain as a sole proprietorship or partnership. We've designed the Business Structure Wizard to be a very accessible starting point for anyone who wants to start a business or change their existing business structure. The Business Structure Wizard guides users through a series of basic questions on their business, industry, finances, and long-term plans. The entire wizard should take approximately 5 minutes or less to complete and provides a recommended company structure based on the user's responses. Go ahead: give it a try: