irs small business forms
Small business taxes – How To Reduce Your Taxes By Being Taxed As An “S” Corporation
Looking for an effective tax reduction strategy for your small business? This article explains how to reduce your taxes by choosing to be taxed as an S corporation. Question: What do all the following small business owners have in common? 1) C corporation shareholders; 2) sole proprietors; 3) partnership partners; and 4) limited liability company (LLC) owners who are being taxed like a sole proprietorship or a partnership. Answer: Each of these entity types has the potential to pay less tax by choosing to be taxed like an S corporation. C corporation owners face the dreaded double taxation of corporation profits. Any corporate profits are usually taxed twice. The corporation must pay its own corporate income tax on those profits. And if the corporation distributes those profits to the shareholders as dividends, those dividends get taxed a second time on the personal income tax returns of the individual shareholders. Ouch! Sole proprietors, partnership partners and LLC owners all face the dreaded self-employment (SE) tax on their business profits. And unlike an employee, they pay twice as much SE tax (15.3%) than their employee counterparts pay in payroll tax (7.65%). What are all these small business owners to do? One option is to choose to be taxed like an S corporation. An existing C corporation that switches to S corporation status can avoid the double taxation of corporate profits. This is possible because an S corporation typically doesn’t pay any corporate income tax on profits. The profits are only taxed to the individual shareholders on their personal income tax return. End result: no double taxation. Sole proprietors, partners and LLC members can legally reduce SE tax by receiving reasonable employee compensation from the S corporation. If this compensation is less than the total business profit, the remaining profit legally avoids payroll tax, because only employee wage/salary is subject to payroll taxes. How do you “choose” to be taxed like an S corporation? This choice is made by filing Form 2553 with the IRS, Election by a Small Business Corporation. Think of this form as an application by an existing small business to be treated like an S corporation for tax purposes. Here’s how it works for each entity type: C corporation. File form 2553. That’s all there is to it. You don’t have to shut down the existing corporation; nor do you have to form a new corporation. The existing corporation continues to exist, just like it did before, as a corporation in good standing of the state in which the corporation was formed. Limited liability company. Likewise, just file Form 2553. You don’t have to shut down the LLC and/or form a new corporation. The original LLC remains intact for legal purposes. You simply submit Form 2553 in order to tell the IRS you want your business treated like an S corporation instead of a sole proprietorship or a partnership. Sole proprietors and partners. Before filing Form 2553, you must form a corporation or LLC. Once this new entity is set up, submit Form 2553. Important: There are specific rules regarding the timing of the Form 2553 filing, so be sure to read the instructions carefully or consult with your tax professional.
About the Author
Looking for more small business tax tips? For a free copy of the 25-page Special Report “How To Instantly Double Your Deductions”, visit http://www.yousaveontaxes.com . Wayne M. Davies is author of 3 ebooks on tax reduction strategies for small business owners and the self-employed.
How to inform IRS of business closure?
I had a small home business last year and when we filed our taxes we added in the income from that business (we had a EIN#) I am no longer doing that work, havent for any part of 2008, but I want to hold on to the EIN#. Is there a form we should fill out or anything? I’d hate to not file anything this year and have a red flag go up….
If you had employees, check the box on the 941, 940, and 1120 or 1065, that says “~company no longer has payroll; out of business” or words to that effect. Same with the state sales tax, withholding tax and similar reports, if applicable. If you had no employees and this was just a sole-proprietorship, Schedule C business, you don’t need to do anything to keep the EIN “alive”. You may have to do something under your home state’s law, however, to retain your franchise (ie, corporation, partnership, LLC, etc.). Annual franchise taxes for a dormant business are usually minimal.
Good luck!
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Small Business Forms Cd-Rom $46.95 Small Business Forms Cd-Rom |
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How To Do Business With The Irs $3 How To Do Business With The Irs |
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Complete Book of Small Business Forms and Agreements $37 Complete Book of Small Business Forms and Agreements |
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Tax Savvy for Small Business $24.37 The essential tax-strategy book for entrepreneurs who call themselves boss.brNamed a Best Tax Book by Entrepreneur magazinebrDevelop the best tax plan for your small business, learn the ins and outs of the tax code and create comprehensive strategies to get back the most from the IRS. Understanding the tax system is vital to the health of every small business. Virtually every decision a business makes has tax consequences that can affect its bottom line — and the IRS is always watching.brTax Savvy for Small Business provides essential information that will free up your time and money for what counts — running your business effectively. It explains how to:brdeduct current and capitalized expensesbrwrite off up to $108,000 of long-term assets each yearbrcompare different business structuresbrtake advantage of fringe benefitsbrkeep records that will head off trouble with the IRSbrget tax breaks from business lossesbrdeal with payroll taxesbrnegotiate payment plans for late taxesbrhandle an auditbrget IRS penalties and interest reducedbrmaximize retirement fundsbruse retirement funds as a tax breakbrThe 13th edition of Tax Savvy for Small Business is completely updated and provides the latest tax breaks, rules, forms and publications. You’ll also find a list of the top 25 business deductions – the best deductions to take and how to claim them, trouble-free.The essential tax-strategy book for entrepreneurs who call themselves boss.brNamed a Best Tax Book by Entrepreneur magazinebrDevelop the best tax plan for your small business, learn the ins and outs of the tax code and create comprehensive strategies to get back the most from the IRS. Understanding the tax system is vital to the health of every small business. Virtually every decision a business makes has tax consequences that can affect its bottom line — and the IRS is always watching.brThe 13th edition of Tax Savvy for Small Business is completely updated and pr@8^¸Që…ÿ¾Úð |
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Tops Business Forms – Irs Approved 1099 Tax Form, 8 X 5-1/2, 5-Part Carbonless, 50 Forms $28.7 meets Irs Specifications With The Five Part 1099 Misc Form. White 20 Lb. Paper. *Assembly Required: No [TOP22993] UPC: 025932229930 UNSPC: 14111814 1.83 LB |
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Tops Business Forms – Irs Approved 1099 Tax Form, 5-1/2 X 8, 5-Part Carbonless, 24 Forms $13.63 Meets Irs Specifications With The Five Part 1099 Misc Form. White 20 Lb Paper. *Assembly Required: No [TOP22995] UPC: 025932229954 UNSPC: 14111814 0.8 LB |
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Don’t Let The Irs Destroy Your Small Business: Seventy-six Mistakes To $1.54 DIVIn this lively book, veteran tax attorney Michael Savage provides essential tax advice to small business owners, many of whom pay exorbitant tax fees for mistakes that may have easily been avoided. Wi/divDIVIn this lively book, veteran tax attorney Michael Savage provides essential tax advice to small business owners, many of whom pay exorbitant tax fees for mistakes that may have easily been avoided. Without staff attorneys at their disposal, small businesses can get into big financial trouble, not out of dishonesty, but because they don’t know where the potential tax landmines lie.Concise, practical and irreplaceably instructive,IDon’t Let the IRS Destroy Your Small Business/Icovers seventy-six areas of tax law that cause business owners the most trouble, regardless of what business they are in: payroll tax liability, excessive salaries, travel and entertainment expenses, fringe benefits, pension plans, owning multiple companies, and many more./DivDIVBMichael Savage/Bis the senior tax partner in the New York law firm of Gersten, Savage, Kaplowitz & Fredericks, where he has represented corporations and individuals throughout the United States for twenty-three years. He is the author ofIEverything You Always Wanted to Know About Taxes, but Didn’t Know How To Ask/IandIGood News/Bad News—A Tax Reform Guide./IHe lives in New York and Aberdeenshire, Scotland./Div |
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The Complete Book of Small Business Legal Forms (Legal Self-Help Serie $1 The Complete Book of Small Business Legal Forms (Legal Self-Help Serie |
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Forms For Business $16.65 Forms For Business |
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Legal Forms for Starting & Running a Small Business $25.36 All the essential forms and step-by-step instructions a small business owner needs to start and run a business!brLike most small business owners, you probably can’t afford to hire a lawyer to draft the legal documents you need in the course of your day-to-day business.brNow there’s an affordable solution — Legal Forms for Starting & Running a Small Business, which provides you with over 60 legal forms and documents and all the step-by-step instructions you need to use them.brThe 6th edition is updated with the latest legal documents, contracts and other forms. Includes all the information and instructions you need to complete and use your forms effectively.All the essential forms and step-by-step instructions a small business owner needs to start and run a business!brLike most small business owners, you probably can’t afford to hire a lawyer to draft the legal documents you need in the course of your day-to-day business.brNow there’s an affordable solution — Legal Forms for Starting & Running a Small Business, which provides you with over 60 legal forms and documents and all the step-by-step instructions you need to use them.brThis collection of essential legal and business documents helps you:brcreate contracts to buy, sell, rent or store goodsbrhire employees and consultantsbrprotect your trade secretsbrcreate noncompete agreementsbrprepare an LLC operating agreementbrborrow and lend moneybrbuy a businessbrlease commercial spacebrprepare corporate bylawsbrrecord minutes of meetingsbrbuy real estatebrand much morebrThe 6th edition is updated with the latest legal documents, contracts and other forms. Includes all the information and instructions you need to complete and use your forms effectively. |
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The Legal Guide for Starting & Running a Small Business: Legal Forms ( $3.99 Most small businesses cannot afford to hire a lawyer to draft the documents they need in the course of day-to-day business. This book, the companion to attorney Fred Steingold’s bestselling Legal Guide for Starting & Running a Small Business, Vol. 1, provides small business owners with more than 75 forms and documents to help them with their business-related legal needs. Illus. |
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Canadian Small Business Kit for Dummies $2.99 An enterprising guide to becoming your own boss. brbrStart and run a winning business in Canada!brbrHey entrepreneurs! Got a great idea and need some straightforward advice on how to turn your dream into a reality? Let two experts show you how to turn your ideas into gold. Covering every aspect of starting, building, staffing, and running your own show, this book paves the way to small business success! brbrbAll this on the bonus CD-ROM/bpValuable software and planning materials, including:brbrAOL® Canada Version 7.0, Business Plan Pro, Marketing Plan Pro, and trial versions of MYOB StartUp Accounting, MYOB Accounting, MYOB Accounting Plus ad MYOB AccountEdgebrbrbGet Smart!/bbrbra href=http://www.dummies.com/www.dummies.com/abrbrSign up for daily eTips at a href=http://www.dummiesdaily.com/www.dummiesdaily.com/abrChoose from among 33 different subject categories.brGet news you can use on everything from money to health to computers.bIntroduction/bpbPart I: Launch Preparations/bpChapter 1: Do You Have the Right Stuff?pChapter 2: First Contact— Is There Any Business Information Out There?pChapter 3: Whose Idea Is This, Anyway?pChapter 4: The Void and How to Avoid It— Choosing a Product and CustomerspbPart II: Blast Off into Business/bpChapter 5: A Vehicle for Your BusinesspChapter 6: Getting Your Gear TogetherpChapter 7: Your Business CoordinatespChapter 8: Custom-made Business— Or Off-the-Shelf?pChapter 9: The Money-Hunter’s Guide to the GalaxypChapter 10: So Long and Thanks for All the CashbrbrbPart III: On Board Your Enterprise/bpChapter 11: Yellow Alert! Incoming Risks DetectedpChapter 12: Co-existing with Other Life Forms I: Customers and ClientsbrbrChapter 13: Co-existing with Other Life Forms II: Suppliers and AdvisorspChapter 14: Beam Up the CrewpChapter 15: Tax Attacks!pChapter 16: Close Encounters with AccountingpbrbPar@ë…¸Qìÿ¾Úð |
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Business Forms On File, 2007 (business Forms On File) $256.95 Business Forms On File, 2007 (business Forms On File) |
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Setting Up a Small Business $57.95 Do you work for yourself? Have you thought about it? Either way, this program is for you. This 2-1/2 hour audio program features CPA Sue Bishop who has served more than 500 small business clients for the last 30 years. She describes how to decide what kind of business entity to be, the differences between sole proprietorship, LLC, Sub-S, and C-corporations. You’ll learn about how to pay yourself and how to pay employees, how to deal with business registration and sales tax, how to set up business accounts, keep records, and understand the way the IRS looks at small businesses and how to avoid audits. |
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Applied Business Punctuation and Business Forms $8.88 Applied Business Punctuation and Business Forms |
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Applied Business Punctuation And Business Forms $8.88 Applied Business Punctuation And Business Forms |
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Ten-Second Business Forms $5.09 Ten-Second Business Forms |
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Business Forms For The Fax And Copier $2.54 Business Forms For The Fax And Copier |