Q: Should I form an LLC for my new business?
A: Yes. While not required, forming a limited liability company offers business owners some legal protection and separates the business from the individual owner. You should consult with a business attorney when forming a new business to set yourself up for success.
Q: What's the difference between a Schedule C and an S Corporation?
A: A single member LLC can be either a Schedule C business or an S Corporation for tax purposes. One major difference is how the information is reported: a Schedule C is part of the individual owner's return, whereas S Corporations file their own tax return.
Q: What kind of records should I keep?
A: The Internal Revenue Service requires that business owners keep records of all income and expense items related to the business. You should keep a log of the date items were purchased, as well as a description of the item and its purpose within your business.
Q: When should I consider hiring someone to help me with my taxes?
A: If you have never operated a business before, learning all the tax rules and figuring out what applies to you can be tough. Even small businesses or side-hustles can benefit from having a tax profession assist, beginning with the first year of operations.
Whatever stage you are at in owning your business, it is never too early to invest in understanding your financial position and setting yourself up for the future. If you’re looking for a professional who can take the complexity and headache out of tax planning, contact us today at kataxandconsulting@gmail.com
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