Tax Considerations

Tax Considerations

The process of choosing a business type and incorporating your business goes hand in hand with considering which tax classification fits you and your business the best. Each entity type has its pros and cons and there is almost certainly a specific recommendation of which one suits your needs the best. We can help clarify those deeds and get you settled in the right bracket and classification to help your business thrive.

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Starting a business will have an impact on your personal taxes. Because running a business is a for-profit venture, you will have income related to the business. There will also be deductible costs associated with operating the company. The factor that will determine whether there is an increase or decrease in the amount of tax liability created depends on whether the business has a net profit or loss. In addition, there may be further taxes on income from other sources.
You must create an entity or submit an election to be taxed separately in order to keep your personal taxes and company taxes separate. C Corps, S Corps, and Partnerships are the business entities that are handled separately from individual taxpayers' taxes. If you need assistance separating your business and personal taxes, don't hesitate to contact us today.
Decide what kind of entity your new company will be (a sole proprietorship, partnership, S corporation, or C corporation, for example) before you launch it because this will affect how you file your taxes. Here are the forms you will need for each entity: Sole Proprietors – Form schedule C, which is filed with their personal taxes. Partnership – form 1065 S Corps – Form 1120 S C Corps – Form 1120