3 Things You Need To Know

Starting a new business is a very exciting and busy time. There is so much to be done and so little time to do everything and to make all the necessary decisions, let alone stay current with the paperwork. That's where we can help. There are a variety of federal and state forms and applications that will need to be completed to get your business started.

Federal ID Number
Securing a federal ID number needs to be accomplished first since many other forms require it. After form SS-4 is complete the IRS can be called to get your Federal ID#. After the completed form is mailed to the IRS, you will receive federal tax coupons which are needed for payroll tax deposits.

State Withholding, Unemployment, and Sales Tax
You will then need to fill out forms to establish your account with the State for payroll tax withholding, Unemployment Insurance Registration, and sales tax collections (if applicable).

Payroll Record Keeping
Payroll reporting and record keeping can be very time consuming and costly, especially if not handled correctly. Let our expertise handle that part of your business so you can concentrate on running your business. Also keep in mind, almost all employers will be required to transmit their federal payroll tax deposits electronically. You should keep personnel files for each employee. Included should be the employee's employment application as well as the following:

W-4 Form - completed by the employee and used to calculate their federal income tax withholding. Also includes necessary information such as address and social security number.

I-9 Form - required to be completed by you, the employer, to verify employees have permission to work in the U.S.

Why Incorporate?

All legal and tax professionals agree, if your business is not incorporated you may be throwing away thousands of dollars in tax savings and deductions.

In addition, all of your personal assets such as your home, cars, boats, savings and investments are at risk and could be used to satisfy any law suits, debt or liability incurred by the business. Forming a Corporation can provide the protection and tax savings needed to give you peace of mind and make your business even more successful and profitable.

Some Benefits Include:

Liability Protection: Properly forming and maintaining a corporation will provide personal liability protection to the owners or shareholders of the corporation for any debt or liability incurred by the business. Personal liability of the shareholders is normally limited to the amount of money invested in the corporation.

Tax Advantages: Another important benefit is that a corporation can be structured many ways to provide substantial tax savings. You can minimize self-employment taxes and increase the number of allowable deductions lowering the taxes you pay on the income of the business. Many corporations structure retirement and tax deferred savings plans for their owners and employees which can provide even greater tax savings.

Raising Capital: Sale of stock for the purposes of raising capital is often more attractive to investors than other forms of equity sales. A corporation can also issue Corporate Bonds to raise capital for expenditures without compromising the ownership of the business.

S Corporations

Deciding whether to elect "S" status can be extremely confusing. Call us today so we can schedule an appointment to sit down and explain the NUMEROUS tax benefits of electing "S" status including tax savings on self-employment taxes, etc.