Business Formations

The Tax side of Starting a Business

Thinking of starting a business? There are structures that can be put in place before you assist your first customer. John Harrington is knowledgeable regarding business formation, including sole proprietorships, partnerships, LLCs, S Corps and C Corps

Sole Proprietorship

  • Owner remains personally liable for lawsuits filed against the business.
  • No state filing required to form a sole proprietorship.
  • Easy to form and operate.
  • Owner reports business profit and loss on their personal tax return.

Partnerships

  • Partners remain personally liable for lawsuits filed against the business.
  • Usually no state filing required to form a partnership.
  • Easy to form and operate.
  • Partnership requires filing of Form 1065 Tax Return
  • Profit or loss on Form 1065 flows through to owners who report their share of profit and loss in the company on their personal tax returns.

Limited Liability Companies (LLC)

  • Independent legal structures separate from their owners.
  • Help separate your personal assets from your business debts.
  • Taxed similarly to a sole proprietorship (if only one owner).
  • No limit to the number of owners.
  • Not required to hold annual meetings or record minutes.
  • Governed by operating agreements.

S Corporation

  • Independent legal and tax structures separate from their owners.
  • Help separate your personal assets from your business debts.
  • S Corp files Form 1120S
  • Profit or loss reported on the 1120S flows through to the owners who report the profit or loss on their individual tax return. Any tax owed on profits are taxed at the owners' personal tax rate.
  • Limits number of shareholders. Shareholders must be U.S. citizens or residents.
  • Allows owners to be employees of S Corp and run payroll for themselves.

C Corporation

  • Independent legal and tax structures separate from their owners.
  • Help separate your personal assets from your business debts.
  • No limit on the number of shareholders.
  • Entity is taxed on corporate profits and shareholder dividends.
  • Must hold annual meetings and record meeting minutes.

Determining the Right Corporate Formation for You

If you are interested in starting a business, already working as an independent contractor, need a plan to pay required business taxes (like quarterly taxes), unsure of where to start as a self-employed taxpayer, or any other business tax situation you might find yourself in, John Harrington can help. John can assist in making sure your business is compliant with State and Federal tax laws.

Confused about the type of business you should form? Let John provide you with the necessary guidance and legal assistance that comes from years of experience dealing with business formations.

Free Initial Business Formation Consultation

Contact John today and he can help you solve your business tax problems BEFORE they arise.