If you’re looking to start a new company in the coming year then you certainly have a lot on your mind, not the least of which is how you will get started, what will you do to market your company and what are your chances of achieving success. The concerns and issues are endless for entrepreneurs, so it’s no wonder that sometimes they can overlook a few things. However, this can be dangerous and ultimately lead to failure.
One of these things that entrepreneurs can’t afford to overlook are taxes. However, by understanding a few important principles you can avoid some of the common tax mistakes that could stop you in your tracks. The first thing you must decide is which type of company you will form, as all of them have different tax implications. Your choices include an S Corporation, a C Corporation or an LLC.
As a general rule, if you are getting help from outside investors go with a C Corporation. If your company structure is small with only one or two owners an S Corporation is probably fitting. If the owners desire more flexibility then consider an LLC, or even a C Corp.
There are several other issues that you must consider, including determining if your stock qualifies as a Qualified Small Business Stock. You also need to consider sales tax issues, payroll tax issues, and net operating losses and whether or not you want to be paid as an employee or as an independent contractor. These are just a few of the tax issues to consider if you’re an entrepreneur. If you have more questions, then please contact us today at GROCO. We can help you set up your company and get you aimed in the right direction for taxes. Click here or call 1-877-CPA-2006.