The Launch Blog: Expert Advice from the CorpNet Team

While paying taxes is a certainty for small business owners, there are some options for how you might pay them. The simplest strategy for paying your small business taxes is to make sure money is available when your tax bill comes due. If that is not possible for some reason, you can register for an IRS payment plan that allows you to pay your balance over a specified amount of time, use a credit card to pay your bill, apply for a bank loan, or apply for a business line of credit. Let’s have a look at each of these options. Option 1: Plan Ahead to Pay Your Taxes The taxes you’ll pay are...

If you're considering taking an S Corporation election, it's important that you review what obligations are involved in keeping an S Corporation viable. An important part of this review includes an evaluation of the reasonable compensation requirement. What is an S Corporation? The S Corporation designation is not a legal business entity in and of itself. Instead, it’s a special tax election made by an LLC or C Corporation allowing them to keep their liability protection keeping the owners’ personal assets separate from the company’s debts and lawsuits, but avoiding the double taxation of...

The S Corporation election deadline for LLCs and C Corporations is March 15, 2024. So, if you’re considering changing your limited liability company or C Corporation tax treatment from its default status to an S Corp, time is of the essence! To be considered an S Corporation for tax purposes in 2024, existing LLCs and C Corporations must file their election within two months and 15 days (within 75 days total) after the start of their 2024 tax year. For example, a company with a tax year that began on January 1, 2024, must file IRS form 2553 no later than March 15, 2024. Entrepreneurs who...

If you already have an Employer Identification Number (EIN) for your business but have recently made some changes, you may be wondering if you need a new EIN. Because EINs are used for reporting certain taxes (such as payroll and excise taxes), it’s essential to follow the IRS’s rules for obtaining and using them. Depending on the type of business entity and the circumstances, the IRS may require your business to get a new EIN. Generally, the following situations call for an entity with an existing EIN to apply for a new one: Owners of an existing registered business entity start another...

Did you know many businesses will have a new federal reporting requirement in 2024? Most registered business entities — like Limited Liability Companies (LLCs) and Corporations — must file a beneficial ownership information (BOI) report with the Financial Crimes Enforcement Network (FinCEN). In September 2022, FinCEN, a bureau of the U.S. Department of Treasury, announced its final rule requiring certain entities to report their beneficial ownership information. The BOI report is designed to provide transparency about who owns and benefits from an LLC or Corporation. It requests...

If you’re the owner of a single-member LLC, you may be wondering if you need an operating agreement for your business. It’s a valid question. You may assume that since you are the sole owner you probably don't need an agreement. After all, you are in complete control of the business. But this assumption is incorrect. While you might be tempted to forego an LLC operating agreement, I encourage you to consider otherwise because there are some significant advantages to having one. An LLC operating agreement may be a new term for you, so I want to explain a few details about LLC operating...

Yes, operating a business as a sole proprietor or general partnership offers simplicity, but that comes at the cost of not having a separation between you as an individual and your company. Are there other options? There are alternate options that include popular entity types like the Limited Liability Company, C Corporation, and S Corporation. For entrepreneurs who want to protect their personal assets and have tax flexibility, registering as a legal business entity, such as an LLC, oS Corpo, or C Corp, is well worth exploring. Continue reading because I’m going to break down the basics...

The multi-member LLC is a Limited Liability Company with more than one owner. It is a separate legal entity from its owners, but not a separate tax entity. A business with multiple owners operates as a general partnership, by default, unless registered with the state as an LLC or corporation. Would it make sense for you to form your business as a multiple-member LLC? To arrive at that answer, you need to consider how choosing that business entity type will impact you legally, administratively, operationally, and from a tax perspective. I encourage you to speak with an attorney and...

What business owners should know about annual meeting minutes for corporations. What are they, who must have them, and how do you create them?

If starting a new business is on your 2022 New Year’s resolution list, we’re here to help you begin on the right (and legal) path. Here are 10 must-have legal documents you need to start a new business. 1. Business Plan Technically, a business plan is not a “legal” document, nor is it required to start a business, but developing a business plan before you attempt to secure financing, look for office space, or even pick a business name, is highly recommended. Creating your plan at the beginning forces you to assess your goals and resources, strategize a road map for success, and determine...

Many freelance professionals and independent contractors operate as Limited Liability Companies (LLCs). The requirements for when a business should send a 1099 form to an LLC vary, as does the 1099 form to send. Generally speaking, this is when LLCs should or should not receive a 1099: When a single-member LLC is taxed as a Sole Proprietorship or a multi-member LLC is taxed as a Partnership, any business that pays the LLC $600 or more for services in the year must send it a 1099-NEC (Nonemployee Compensation) form. If a business has sold $5,000 or more of consumer products to an LLC for...

Before the advent of the S Corporation in 1958, entrepreneurs had two options for forming a business entity. To help encourage small businesses in America, Congress and President Eisenhower created the Subchapter S Corporation. In this post, I’m going to run through some of the S Corporation pros and cons to consider.

Ready to hire? Becoming an employer is a big responsibility. One of your primary tasks is to pay and withhold the correct employment taxes, and you’re accountable for explaining that process to your employees. Here’s what you need to know about breaking down paycheck withholdings and deductions for your employees.

As an eager and enterprising entrepreneur, you may set your sights on multiple business ventures and wonder if one person can own multiple LLCs. Fortunately, no federal or state limits exist on the number of LLCs someone can own. However, aspiring business owners should know that other factors could prevent them from having ownership interest in multiple LLCs.

Whether you’re a Sole Proprietor with only a handful of workers or a corporation with hundreds of employees, you are responsible for collecting and paying employment taxes to federal and state tax agencies. However, while federal payroll taxes are the same no matter where your business is located, state and local payroll taxes differ according to the jurisdiction’s laws and tax codes. Payroll taxes can be confusing and overwhelming to new business owners. In today’s article, I’ll break down the types of payroll taxes to help you understand what they are and what you need to consider....