“As a small business owner, I can hardly keep my head above water all year just running my business. I don’t have time to think much about tax planning until tax season approaches, and then I get totally overwhelmed. What can I do to better prepare?”
In short: Tax Smart is dollar wise. Yet how does an individual or small business owner know if they are getting the best tax planning strategies? Tax planning begins well ahead of the year’s end, and if it doesn’t, then opportunities can be missed.
Over the next few weeks we will share some tax facts that may help encourage a tax planning appointment for 2015 if you haven’t gotten one already. You can set your tax planning appointment from our website as well as access a tax organizer on our client forms. Whether you partner with G2cfo or another tax professional, our goal is to make tax planning and being tax compliant as stress free as possible.
Here’s our first topic.
Legal Entity – what’s the big deal? For start-ups and even more mature businesses, the choice of legal entity is very important. Two of the most common legal entities for small business are S-corporation and Limited Liability Company (LLC). Both have benefits related to personal liability protection, tax strategies, and retirement planning. Failure to have your business incorporated can lead to missed tax reduction strategies and expose your personal assets. Getting professional advice on which form of entity to choose is wise and establishes boundaries you need to separate your business assets from your personal ones.
For almost all start-up companies, the initial focus when choosing a legal entity should be:
- Tax and Tort (think slip and fall) liability issues
- Reporting (state and federal) and accounting requirements
- Protection of intellectual property (very important)
- Personal liability
You may be tempted to be your own attorney and try to manage this on your own. Protect yourself and your business from the very beginning and seek the assistance of a lawyer and a tax professional to avoid regret later.