Starting,Business,amp,#40,#41, DIY Starting A Business (2 - 3)
Normal 0 false false false MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable{mso-style-name:"Table Normal";mso-tstyle-rowband-size:0;mso-tstyle-colband-size:0;mso-style-noshow:yes;mso-style-parent:"";mso-padding-alt:0in When starting a new work at home business it is very easy to become consumed by it. We spend so much time trying to get the business up and running that we may end up becoming burned out and lose our motivation. There is so much to learn and
Starting a Business - (2 - 3)When we last met, I went over some of the need forlicenses and permits, as well as how to locatewhich one are right for you.You may already have a plan and the form of yourbusiness entity set and if you do great, if not,I'd like to share a few things with you.Form of Entity?All offer advantageous to you when you start abusiness, however there are disadvantageous too.- Sole proprietorships are the most simplefor a business owner.A sole proprietor does not have to file aseparate business tax return.A Schedule C is attached to your 1040 andfiled with the IRS.Gains and losses from the business aresimply combined with other personaltaxable items,Disadvantages include having personalliability and lack of investmentflexibility.If you need cash you need to personallyhave it in the bank, or you can borrow itfrom the bank.- Partnerships are similar to soleproprietorships, in that the formation isgenerally easy, however, you would be wiseto use an attorney.Also the taxes are simply passed throughto the individuals personal tax returns.The disadvantages are the same as being asole proprietor, personal liability andlack of investment flexibility.- Limited Liability Corporations (LLCs)do much better in limiting your liability,as the name implies.Disadvantages include the costs of settingup.Federal limits on who and what are able tobe LLCs and the tax implications bothfederal and state.- Corporations offer the most personal andasset protection and have the greatestflexibility of any business entity.Corporations vary in their structure andorganization.A corporation is not just a corporation.You will need to select from varioustypes.The two typical corporations that mostCPA's or attorneys will recommend areS and C corporations.You should keep in mind that every statehas different laws for corporations.What an lawyer may tell someone inCalifornia may not be true in Florida.S Corporation:- Allows for limitedliability of theowners/officers/directors. -Typically runs on a calendar year.- Full disclosure ofcorporate owners.- Profits pass through tothe individual taxreturn 1040. No taxbrackets separate from thepersonal tax bracketsapply.- All profits are taxedeven if not distributed.- State taxes will applyfor individuals who arelocated in a state with anindividual state tax.C Corporation- Allows for limitedliability of theowners/officers/directors.- Runs on a fiscal year,which may be designatedby the board of directors,rather than on a calendaryear.- Nevada requires nodisclosure of corporateowners.- Profits are taxed atcorporate rates on an 1120return separate from theindividual return.- Profits can be kept asretained earnings.When this article resumes, I'll go over theaccounting and taxation needs of a business. Lookforward to seeing you then.This article on STARTING A BUSINESS? is not"professionally" advising you on business matters,or business agreements. If you have any concernsin regards to your business, I would adviseconsulting an attorney.© Working at Home Ideas and Informationhttp://working-at-home-ideas-and-information.com/269 Portico AisleIrvine, CA 92606
Starting,Business,amp,#40,#41,