Attention start-ups and new business owners! Here's a little secret the super-wealthy use to build their wealth, protect their assets and pay minimum taxes - legally!
Part of the American dream for many people is starting a small business to enjoy the lifestyle most people can only dream about. Of course having a business involves much hard work but nothing beats the 'luxury' of being your own boss.
Why 7 out of 10 new businesses FAIL.
The reason why most new businesses fail is because of poor planning, insufficient funds and having the wrong business structure.
For speed of start-up and autonomy of control, nothing beats the sole proprietorship. But if you intend to grow your business, expand, hire employees, lease or acquire real estate, that structure will limit you.
Sole proprietorship makes your responsible for all the debts. So if your business fails, you could lose EVERYTHING - your home, your savings, your car and more. You could be sued for everything you've got!
Another disadvantage of sole proprietorship is that it's hard to raise money to grow and expand your business. You will need more funds to take your business to the next level.
A unique way to save your business form a catastrophe. Before you set up a corporation you should seek expert legal and financial advice. It is essential that you have a lawyer and an accountant to help you figure out the tricky tax laws and other legal issues that may pop up in the future.
A lawyer should look over any contracts before you sign them, when you are starting a small business to make sure you are getting what you think you are. You need to both protect yourself from potential pitfalls and make sure you receive all the benefits you're entitled to receive.
An accountant can give you advice to keep your money working for you, not against you. Most businesses fail simply because the "numbers" are working against them. Starting a small business is never easy, but your chances of success double if you have the right people on your side.
The #1 Mistake most business owners make when setting up a corporation.
If you are setting up a corporation, you have to decide if you want it to be a separate legal entity that pays corporate taxes, a C-Corporation, or not.
To make an S-Corporation, you need to have the shareholders sign and submit form 2553 to the IRS, to request that status. That can be done later, after you form the actual formation corporation.
Protect yourself from losing your assets!
The benefits of having a corporation include, being able to purchase tax deductible benefits such as health care, childcare etc. for the shareholders and employees and count them as a corporate expense.
If you are operating a sole proprietorship business, it may be necessary to form either an S-Corporation or a C-Corporation. Both of these corporate forms will protect your personal assets in case you get sued or go bankrupt.
Even if you provide contract services you could be sued over an automobile accident involving your business or even over a disagreement on costs - many times it's not fair to the business owner. That's why you must bullet-proof your business by setting a structure that's right for you.
How to save a bundle on your taxes!
Concerning corporate tax issues, by changing to an S-Corporation you avoid having to pay corporate taxes and your corporation is changed into a pass-through entity for tax purposes.
Many owners of small business are afraid to incorporate because, in the case of a C-corporation, they also have to pay taxes on corporate profits, as well as personal income taxes.
There are easy solutions to this problem. Say you have your own business as an architect, and you form a C-Corporation, in order to attract outside investment. You can still have your corporation, which you control, pay you the fair market value of an architect as a salary.
From your point of view this is income, and you must pay personal income taxes on it. However, from the viewpoint of the corporation, which is a separate legal entity, this salary is an expense. Other expenses are health care and child care as mentioned above.
Also, hiring employees counts as a corporate expense. As a sole-proprietorship, you have to pay all of your Social Security and Medicaid charges, about 15.3 percent, but in a Corporation, HALF of this becomes a corporate expense, which can be a big advantage.
There are other factors that determine the success of your new business. Like planning, marketing and advertising. On this website you'll find more useful simple low-cost ways to help you attract more customers and promote your business.
Wishing you success and high profits.
PLEASE NOTE: All material provided on this website is provided for informational purposes only. You should always seek expert legal advice before making any serious business decisions.
Why 7 out of 10 new businesses FAIL.
The reason why most new businesses fail is because of poor planning, insufficient funds and having the wrong business structure.
For speed of start-up and autonomy of control, nothing beats the sole proprietorship. But if you intend to grow your business, expand, hire employees, lease or acquire real estate, that structure will limit you.
Sole proprietorship makes your responsible for all the debts. So if your business fails, you could lose EVERYTHING - your home, your savings, your car and more. You could be sued for everything you've got!
Another disadvantage of sole proprietorship is that it's hard to raise money to grow and expand your business. You will need more funds to take your business to the next level.
A unique way to save your business form a catastrophe. Before you set up a corporation you should seek expert legal and financial advice. It is essential that you have a lawyer and an accountant to help you figure out the tricky tax laws and other legal issues that may pop up in the future.
A lawyer should look over any contracts before you sign them, when you are starting a small business to make sure you are getting what you think you are. You need to both protect yourself from potential pitfalls and make sure you receive all the benefits you're entitled to receive.
An accountant can give you advice to keep your money working for you, not against you. Most businesses fail simply because the "numbers" are working against them. Starting a small business is never easy, but your chances of success double if you have the right people on your side.
The #1 Mistake most business owners make when setting up a corporation.
If you are setting up a corporation, you have to decide if you want it to be a separate legal entity that pays corporate taxes, a C-Corporation, or not.
To make an S-Corporation, you need to have the shareholders sign and submit form 2553 to the IRS, to request that status. That can be done later, after you form the actual formation corporation.
Protect yourself from losing your assets!
The benefits of having a corporation include, being able to purchase tax deductible benefits such as health care, childcare etc. for the shareholders and employees and count them as a corporate expense.
If you are operating a sole proprietorship business, it may be necessary to form either an S-Corporation or a C-Corporation. Both of these corporate forms will protect your personal assets in case you get sued or go bankrupt.
Even if you provide contract services you could be sued over an automobile accident involving your business or even over a disagreement on costs - many times it's not fair to the business owner. That's why you must bullet-proof your business by setting a structure that's right for you.
How to save a bundle on your taxes!
Concerning corporate tax issues, by changing to an S-Corporation you avoid having to pay corporate taxes and your corporation is changed into a pass-through entity for tax purposes.
Many owners of small business are afraid to incorporate because, in the case of a C-corporation, they also have to pay taxes on corporate profits, as well as personal income taxes.
There are easy solutions to this problem. Say you have your own business as an architect, and you form a C-Corporation, in order to attract outside investment. You can still have your corporation, which you control, pay you the fair market value of an architect as a salary.
From your point of view this is income, and you must pay personal income taxes on it. However, from the viewpoint of the corporation, which is a separate legal entity, this salary is an expense. Other expenses are health care and child care as mentioned above.
Also, hiring employees counts as a corporate expense. As a sole-proprietorship, you have to pay all of your Social Security and Medicaid charges, about 15.3 percent, but in a Corporation, HALF of this becomes a corporate expense, which can be a big advantage.
There are other factors that determine the success of your new business. Like planning, marketing and advertising. On this website you'll find more useful simple low-cost ways to help you attract more customers and promote your business.
Wishing you success and high profits.
PLEASE NOTE: All material provided on this website is provided for informational purposes only. You should always seek expert legal advice before making any serious business decisions.