I own my own company with one partner. Currently we are an LLC. I am wondering if at the end of the year we have a company profit after all expenses of $50,000 what is the best way to pay the smallest amount of taxes. Should we cut a check to ourselves and then loan the money back to the company so we just pay individual taxes instead of corporate taxes?  Are we better off becoming an s-corp? Any suggestions would be great !!!
213885
1. Make sure you maximize your tax deductions. Plow more money back into the business - marketing, new computers, etc. and claim them as deductions\n\n2. Open a Self Employment 401K http://www.powerhomebiz.com/vol149/401k.htm and maximize it. You can put in as much as $16,000 per year + 25% of business profits. It is tax deferred so you don't pay taxes now, but at least you can use it to save for your retirement.
28719
Yes you would be able to clain it as a business. As for all the other questions here they come at ya.!\nyou will pay taxes on the money that you brought in to the company, you will also need to have a name for your company. Your deductions can include the computers, wires, internet bills, telephone bills, business cell phone bill that relates to the business, pen, pencils, printing of the brochures, and business cards, etc.keep a ledger of items that you pay for (ex. office supplies, computer hardware, utilities, bank charges (other than the personal account has to be a seprate acct.) Postage ( for bills, and late payments) software, advertising. You can also deprecitate your hardware for a period of time, (ex. computer, printer, etc.)\nThe forms would be located on the www.irs.gov web site. Take the journal, payments that were given to you (checks, recipt for cash etc) Bank statements, all info pertaining to the business your cards the brochures. If you were paid cash then you need a recipt showing that you were paid in cash. I hope this helps. Good luck
457994
sure this is viable, and would just mean you have to complete a tax return each year to declare all your income. i did my first tax return online earlier this year and it was quite simple.\nif you are interested in a short course on starting a business & business planning which you could do from home around your work, check out the site below...
145581
If they are employees, you will need to determine what their "average" monthly or annual pay is.  Then, using the tax charts from the IRS, you can determine how much should be withheld.  You will also need to check your state tax rates, as well.  What matters most is that the correct amount is deducted by the end of your reporting period, whether that is weekly, monthly, quarterly or yearly.\nIf they are commission only, can you classify them as independent contractors?  If you can, then you won't have to deduct anything at all--you pay the full commission and they are responsible for setting aside and paying their taxes.
520990
Yes. It is income and in the US you are going to pay taxes on income. (MOST of it anyway). There is more that is needed to answer the question. If the earnings are from the sale of the account then you might have Capital Gain. As an accountant my best advice is to contact an accountant. Probably not much help for your question but there are too many variables to fully answer.
260126
It really depends on your deductions.  I usually suggest to employees, family and friends that they claim 1 less deduction than allowed.  In your case, if you are married, filing jointly with 0 dependents, you say you can't claim any children, you should have the highest wage earner claim 1 deduction and the lower wage earner claim 0.  You should, at the end of the year, end up either getting a small refund, or owing a small amount, $100 - $200.  You should be filing a full form 1040, not the 1040EZ or any short form, and claim all the deductions that you can.  I usually resolve tracking my deductions by using a home accounting program such as Microsoft Money or Quicken.  It is just like using a check book, but keeps track of where your money goes.  It also makes reconciling your checkbook monthly very simple.  At the end of the year, I use a tax preparation program such as Turbo Tax, which interfaces with Quicken, and summarizes everything very quickly.  The only time that I have had to pay any taxes in the past 10 years is when I sold rental property and made a tremendous profit.
597703
My husband and I are opening our own business also and have heard some horror stories about friends of ours who tried to do their accounting themselves and ended up owing the IRS thousands.  I think it's worth it (especially for peace of mind) to go ahead and hire an accountant to do your taxes and who will guide you with the rest of your accounting also.  You can shop around and get quotes from different accountants and also ask other business owners in your area who they trust. :)
398563
You need to register your business with the State then get the IRS to issue you with your employer identification number. This is like the business SSN.\n\nThere are 4 broad business classifications:\n1/ Not for profit \n2/ Sole proprietor - \n3/ Partnership\n4/ Corporations - includes S- Corp, C-Corp and LLC's. If you incorporate as either an S-Corp or a C-Corp, then you are taxed at the lower personal rate rather than the higher corporate tax rate assessed to LLC's. The legal implications on all 3 are pretty much the same. The key differnce btw an S-Corp and C-Corp is that with an S-Corp, you pass thru business losses & income thru your personal returns (so you can pay less or zero taxes) while with a C-Corp, you can't do that. Most people prefer S-Corp's since it gives the better tax advantages out of the 3. \n\nBest advice is to always work with a CPA so they can help you with the structuring and setting up of the books.
29466
The safest (and maybe smartest) way to approach this is to look into filing a 1040ES, Estimated Tax for Individuals.  It helps you estimate what your income not subject to withholding (such as your business) will be, and to calculate the estimated tax payment so you can make quarterly payments to the IRS.\n\nThis is advisable because if you under-withhold based on your income, you can be penalized by the IRS for it.  Here is a link to the form and its instructions.  You'll need Adobe Acrobat and/or its web plug-in to view it:
354344
You can incorporate many number of ways.  The best way to do it is sit down with a CPA and go through various options.  There are incorporation where you can be LLC or S - Corp and other forms of a company.  Depending on your choice and benefits you can reduce the taxes that you have pay at the end.
332872
First...stargates answer is totally WRONG!\nYou have two sources of income.  A W-2 income job and a self-employment income.  Any expenses associated with your W-2 job is reported on Form 2106 and deducted as a misc. itemized deduction.  Won't get it unless you itemize.\nThe S.E income is reported on Schedule C of the 1040.  You may deduct any normal and reasonable expense in the ordinary course of business, even if it results in a loss.  You need to be aware of Hobby Loss rules.  If you lose money 3 out of 5 years, the IRS can say your business is only a hobby and your expenses will be limited to your income.  To avoid that, make sure you have a separate checking account, phone, insurance, business licenses.  That way, you can prove you are TRYING to make a profit but aren't.  Good luck
48190
Quicker Tax Preparation: As a sole proprietor, filing your taxes is generally easier than a corporation.Simply file an individual income tax return (IRS Form 1040) including your business losses and profits. Your individual and business income are considered the same and self-employed tax implications will apply.\n\n\nLower Start-up Costs: Limited capital is a reality for many startups and small businesses. The costs of setting up and operating a corporation involves higher set-up fees and special forms. It's also not uncommon for a lawyer to be involved in forming a corporation.\n\n\nEase of Money Handling: Handling money for the business is easier than other legal business structures. No payroll set-up is required to pay yourself. To make it even easier, set up a separate bank account to keep your business funds separate and avoid co-mingling personal and business activities.
608666
I'm not an accountant, but I have a corporation in Texas.  Either way, it's expensive and you're going to spend several hundred dollars, so if your business doesn't have much liability now, you may want to wait and just file a DBA as a partnership.\n\nFor either of them, you need to file with the Secretary of State, here's the link, it'll tell you how to file, fees, etc.\nhttp://www.sos.state.tx.us/corp/businessstructure.shtml\n\nWith your size business, if you go as a corporation, you should elect to be an "S" corp.  This is very easy and lets you pass any profits from the corporation to the shareholders as wages.  Any losses are passed to the shareholders and you deduct from you personal taxes.  The corporation files a year end tax form, and K-1 showing the percentages for each shareholder.  You then file a supplement page with your 1040.  \n\nThe main difference with the LLC I think is record keeping.  If you're a corporation, you need to have annual meetings, keep articles of incorporation, detailed records of any changes.  Costs are about the same.   I forget the filing fee, but I think it's like $400 to register the name and paperwork.  You don't need a lawyer if you can find the paperwork that'll show you what you need.\n\nFranchise tax is nothing to worry about.  As a corp in Texas, you need to file 2 forms with the state every tax year.  One just shows the names of the directors and the other is your income; but if it's less than $250,000, you don't owe anything.
655880
Depending on your state.  Most require nothing.  I cant say for sure though that all are that way.  Check out your states Secretary of State website, and they can provide you with more information.  Example of a search would be California Secretary of State, which is in this case http://www.ss.ca.gov\n\nIt would still be a good idea to set up a small corp, such as an LLC to offer you financial protection.  Say for example your art work gives someone a paper cut and it gets infected and they die, your personal assets would be protected if you have set up a corp properly.  Its not expensive to do (maybe $100-200) if you get a good book and do all the filings with your state yourself.\n\nGood luck on your new company!!!\n\nEdit:  A business licence has nothing to do with filing or dealing with taxes... Unless of course you open a corp and have to pay corp taxes (LLC's taxes in California are $800 a year).  You would just claim the income on your personal taxes under the MISC INCOME portion.  If you have a Corp you will get a K-1 from that corp with your earnings.
483376
I've got my own LTD company. First find a good accountant who specialises in small businesses, he will keep you right as to everything you need to do. You need to decide on your company name and check it again the list at Companies House (you can do this on the net). You need to decide whether you wish to register for VAT (if your turnover is above a certain amount you don't have a choice, you must be registered). You will need liability insurance, but again a good accountant will point you in the right direction. Your accountant can also be your company secretary so you don't need a partner. Good luck!
54563
They dont really have to send you a 1099 unless they paid you $600 or more.  You could put it on line 21 as other income.  But, the best thing to do is probably to put it on a Schedule C so you can deduct any out of pocket expenses you had associated with that income.  If you put it on Schedule C though you will have to pay Self Employment tax  of 15.3 percemt because you made over $400
480114
Due to the complexity and extra cost of opening a corporation, I would suggest an LLC.  With a one member llc it is treated much like a sole proprietorship.  Gains will be taxed at your personal rate.  But if you live in this home for 2 out of 5 years, then you are entitled to a 250k exemption from the sale of the home.  If you plan on buying and selling many houses then maybe an Inc would be better.  Consult a lawyer and/or CPA.  It all depends on the facts and circumstances and how big you plan on becoming with your investment activities.  Inc are easier to get financing... LLC is cheaper and you can open quite easily by yourself.