Do you have a business or maybe you are thinking about having one. It could be a company with employees, an information marketing business, a mlm distributorship or maybe you are an independent contractor. If so, you should be incorporated. You may have read about the tax deductions available to business owners. If you are not taking advantage of these you may be leaving money on the table. Follow tax laws for the advantage of your business. They were written for that purpose.
I just finished setting up another Subchapter S Corp. and outlined the essential steps in this process. Most people think they need to hire a CPA or business expert to get this done. You do not. Al the information is on line. Simply take action. Note: I am not a tax advisor or attorney. I am an advocate of using readily available information for making your own decisions and taking action.
Summary of The Three Steps…Details to Follow:
1. Register with the state where you select to be incorporated. This does not need be the state of your business location or residence. My latest registration is in Nevada and I live in Florida.
2. File for an EIN number with the IRS. This is an employee identification number and can be obtained on line almost instantly once you have your corporation registered.
3. If you are filing for Subchapter S status you must fax a completed request form to the IRS with your Corporate identity (name ) and your EIN number. That is why you follow these steps in sequence. The form is easy.
Additional Details of Setting Up A Corporation:
Types of Corporations:
The most common legal entities are a C Corporation and and S Corporation with an LLC growing in popularity. Generally, if you are a entrepreneur or privately held company with one or a few shareholders, an Subchapter S is likely what you will use. Some people prefer an LLC for specific types of businesses. Do your own research then act. You can set up an S Corp or LLC and then convert to a C Corp. The reverse may difficult.
Where To Incorporate and How To Do It.
The two most popular areas are Delaware and Nevada. I liked Nevada for a number of reasons but a lot of people use the state they are in and a lot of people select Delaware. Once the state was chosen I selected a registered agent called them and in about 20 minutes they had everything they needed to file with the State of Nevada.
Two weeks and about $300 later I received my papers and at that point could register the officers with the State. Another $125 unless you are late like me and pay a $75 penalty. (Rates vary by state and so do annual renewals.)
EIN and Subchapter S Status
Once you have registered the officers which can be done on line got to the IRS site and apply for an EIN number. This is done online, you receive your EIN almost instantly and there is no additional charge.
With the EIN number go back to the IRS site and print out form 2553 if you are filing for Subchapter S status and fax it in. You do not have Sub S status until you receive a letter from the IRS confirm such status.
Since I incorporated in the State of Nevada I set up a virtual office in Las Vegas. So my business cards show offices in multiple states which I liked. There are tons of places that do this. I found one that set me up for $50 and charges $30 per month.
I just went through this process and it was relatively easy. However I recognize if you have no experience with this it may be confusing. Normally a local CPA firm can help you for a reasonable fee. I recommend anyone in business to be incorporated. It will make your life easier when it comes to keeping your business income and deductions separate from your personal return items.
Accept The Responsibility and Take Action Starting Now!!
Sending all my readers the energy of wellness, happiness and peace.
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Steve is the President of International Business Consulting Resources. His firm specializes in guiding companies to rapid increases in revenue and profits with a sustainable growth rate. Don’t miss my FREE Report: How To Make More Money With Your Business Now and Long Term I am building my practice and welcome new client inquiries. Call me for a fee consultation at 727-587-7871 Remember many of my business building articles can be found at Steve Reports and my prosperity building tool (best tool ever for helping you manifest your goals and dreams) is The Prosperity Tool Chest and guiding articles posted very often at Prosperity Tip