Starting a new business can be an exciting time in your life. You have put a lot of time and energy into the business and you want to make sure that you have it all in order. One of the things that you must take into account is the type of entity that your business will be. This can have some major influences on the way that your business needs to be set up as well as the way you will file during tax season. Having the professionals from Beaverton, OR on your side from the beginning, whether you are choosing the entity that works for your business or filing taxes, and help your business to go smoothly.
There are several types of business entities you can choose for your new adventure. Each of them are going to mean different things for the setup of your business as well as the paperwork that you will need to fill out when it comes to tax season. Here at Falisha Griffin, we will be able to help you pick out the business entity that is right for you and the way that you want to run your business. Let’s take a look at some of the different options when choosing a business entity for you.
DBA
The first option is DBA or sole proprietorship. This is a business that is attached to the owner, even though it could have a different name. The owner is going to be liable for the company as well as any debts that occur and the income is going to go on the personal tax returns. If you pick this option, the professionals at Falisha Griffin are able to help you file your taxes to take this extra income into account.
The benefit of this type of entity is that it is really easy to maintain and to setup. You won’t have to do a lot of work; just open the business and get started. The negatives is that you are going to be personally liable if there is anything that goes wrong with the business or if there is excess debt. This could mean that you might lose your personal assets, cars, house, and other items if there is a lawsuit against your company.
C-Corporation
A corporation is any business that is a legal entity from the owners to shield these owners from any company debt or personal liability. The business is allowed to be sued or to sue, to sign contracts, and to purchase property. You can raise money for the business with stocks if you would like and there are a lot of tax advantages of this kind of business. Some of the tax benefits we at Falisha Griffin can help you with when it comes to a corporation include healthcare programs, business expenses and more. You will also file a separate tax return on this kind of income.
The benefits of this type of corporation is that it is a prestigious way of doing business that can also lower your tax rate and helps you to keep more money in your pocket. But you will need to go through more paperwork and this is often a bit more expensive compared to the DBA.
S-Corporation
This is another type of corporation that you can choose for your business. As a small business, you may choose to go with this option because it allows the losses and profits to show up on shareholders’ tax returns without making them pay the taxes on the profits twice. You won’t be able to deduct as many expenses with this option, but it can save a lot of money when it gets close to tax time.
The benefit of this kind of corporation are nice. You will be able to enjoy having a prestige of the corporation on your name without having the shareholders’ get taxed more than once. This is a great idea for small corporations. The negatives are that you will need to go through a lot of formality and paperwork to get your corporation label and it is a bit more expensive. The professionals at Falisha Griffin can take a look at your business structure and help you to determine if a corporation is the right choice for you and which type of corporation is going to work out the best.
Limited Liability Company
These are a nice hybrid between a partnership and a corporation. It is able to provide pass through taxation and easy management just like with DBA, but you also get some protection that is found in corporation. This is one of the newest types of business that wasn’t brought about until 1977. The LLC separates out the owner from the business, but there are not as many formalities and stocks are not present.
The benefit of this option is that it provides the owner with some protection in case the business goes into debt or gets sued. This option is a bit more expensive, and you will have to go through some more paperwork as well. You can still be the one in charge of your business although you will be taxed higher than a corporation.
Figuring out your taxes each year can be a challenge. There are many factors to take into account and when your situation changes, you may be unsure of what you need to report and how to fill out all the forms. When you need help with your tax filing, make sure to contact at BTL & Company, P C, Tax & Accounting in Beaverton, OR. Falisha Griffin is able to assist with all your tax filing needs to ensure you get everything sent in properly without any issues.
BTL & Company, P C, Tax & Accounting