A Savvy business owner can save thousands by minimizing the taxes from his turnover. For this, he has to make a perfect strategy for running a business that will help him to grow his business and to get more profit. Tax Treatment includes many steps. Business entity decisions are the first step to establishing the best tax treatment. If the owner will not choose an entity for his business he has to pay individual owner tax returns.
There are four primary types of business structure: C-Corporations, S-Corporations, LLCs, and multi-member LLCs.
A C-corporation is a business term that is used to distinguish this type of entity from others, as its profits are taxed separately from its owners under sub chapter C of the Internal Revenue Code. In an S-corporation, the profits are passed on to the shareholders and are taxed based on personal returns.
S-corporations are ordinary business corporations that elect to pass corporate income, losses, deductions, and credit through to their shareholders for federal tax purposes.
A limited liability company (LLC) is a corporate structure whereby the members of the company cannot be held personally liable for the company’s debts or liabilities. Limited liability companies are essentially hybrid entities that combine the characteristics of a corporation and a partnership or sole proprietorship.
4) MultiMember LLC’s:
When a limited liability company has more than one member, it is defined as a multi-member LLC. As a default, a multi-member LLC will be taxed (by the IRS) as a partnership.
Steve Franko Law Firm, works for small organizations as a Tax Treatment Lawyer. We work in a strategic way which will help an organization maintain a long term relationship. The clients trust us as we do our work better. Contact us for a consultation about the benefits your business can see results from selecting the proper business structure.