What Is the Best Business Entity for Me?

Question: What is the best business entity for me?

Answer: In simple terms, the best entity for you depends on many factors, including what you sell, your market and industry, ownership structure, capital requirements, liability and risk tolerance, costs, and many other things. When selecting a business entity, you should always work closely with an attorney, financial advisors, and tax professionals who can carefully evaluate your goals and offer sound advice, both in the short- and long-term. From a tax perspective, there are significant financial implications for single-member limited liability companies (SMLLC), depending on your tax filing status. Net income from your business flows through to your individual income, together with wages and other earnings, and is reported in your 1040 and Schedule C forms. Filing taxes this way can impact your effective tax bracket. You’re also required to pay a 15% self-employment tax on your net income as well. If you’re operating your business as a Single-Member LLC, you should consider applying for S-Corporation status with the Internal Revenue Service (IRS). If your annual net revenue is over $30,000, and you’re approved to file taxes as an S-Corporation (or S-Corp), you can significantly reduce the self-employment taxes owed. If you file as an S-Corp, be prepared for additional compliance requirements, including increased payroll and tax filing expenses.

Disclaimer: This content in our videos is for informational purposes, and does not constitute individual legal or tax advice. No accountant-client relationship is created solely by your view or use of a video. You assume all responsibilities and obligations concerning any decisions, conclusions, opinions, or actions you may take regarding your use of the videos.

SCHEDULE MY FREE CALL

With Tax Hive’s years of experience in tax and business services, we use our expertise to make your life easier so you can focus on building your business. Ever changing rules require a team who knows you, your business and the tax implications. Our tax professionals meet your needs while helping you manage tax risk, control costs and reap maximum benefit. If you’re ready to get started, CLICK HERE to schedule a FREE strategy session with one of our specialists today.

Schedule your FREE 15 minute call now!