My fiancee and I are about to start a new business, but I'm having personal problems with the IRS. If things don't work out with the IRS, I don't want to lose the business. Will incorporating the business seperate it from my personal issues and protect it from any IRS actions that may be taken against me?
2007-04-21 11:05:11 · 8 answers · asked by Ree 1 in Business & Finance ➔ Taxes ➔ United States
I guess I should point out that my fiancee and I would both be independent stockholders, at least for the time being. Don't know if that makes a difference.
2007-04-21 12:22:16 · update #1
It depends. Generally, a legal entity will separate personal from business liabilities. The benefit of a legal entity for IRS purposes is that the IRS has to wait for money/property to be distributed from the entity before the IRS can get at the money/property. If you happen to live in a common law state (i.e., not a community property state) then you might be able to have distributions go to your wife. You will want to talk to a tax attorney about this.
Also, you will want to be careful to avoid the transferee liability rules -- which essentially say that if you contribute money/property to another taxpayer (including a corporation that you own) for less than full value, the IRS will be able to attach a lien and levy on assets equal to the amount gifted.
Here is a link to an article that I wrote on this topic:
http://www.mechanicsofmoney.com/taxes/asset-protection-employment-taxes-llcs/
Best of luck,
Kreig Mitchell
http://www.irstaxtrouble.com/longmont-colorado-tax-attorney.php
2007-04-23 04:06:15 · answer #1 · answered by colorado_tax_attorney 1 · 0⤊ 0⤋
Incorporating may protect YOU from the business's tax problems. As long as YOU own the business, the IRS can seize the entire business if you owe them enough.
2007-04-21 13:47:15 · answer #2 · answered by STEVEN F 7 · 0⤊ 0⤋
best for you! I continuously help small company this is what made this u . s . and that's continuously good to take heed to from different well matched energetic human beings! certainly it won't result something ($200 ). the very maximum suitable concern you're able to do for your self even if is to establish a payroll account and take a usual paycheck. you will ought to deduct taxes etc however the earnings is which you would be on checklist as being employed. in spite of if it won't remember to you at the instant it facilitates various procedures. a million. you would be waiting to funds greater beneficial to your online business. 2. you would be waiting to lots greater beneficial calculate how lots you rather ought to be charging for centers. 3. you would be waiting to work out while you're rather being worthwhile - and if that money is sufficient to justify a company. 4. you pays social risk-free practices (this could be needed interior the destiny while it comes time which you will collect the ss advantages.). a good accountant can propose you for a fee of precisely how and what archives you ought to save. this is a rather basic technique as quickly as you recognize how. could be clever to hire a CPA to set you up and then basically provide him your books at twelve months end for the suited tax filings. the rest you're able to do your self. good success costly!
2016-10-13 03:29:08 · answer #3 · answered by ? 4 · 0⤊ 0⤋
No it won't. The business was started as a sole priorter at the start of the Tax issues and it is OPEN to search due to its the primary source of income.
Get a good tax preparer or specialized attorney. IT will be about $300 or so per person. WORTH EVERY PENNY & YOU CAN WRITE IT OFF AS A BUSINESS EXPENSE!
HOT DOG! Good stuff huh!
2007-04-21 11:11:30 · answer #4 · answered by Denise W 6 · 0⤊ 1⤋
Yes. The fact that you already have a judgement against you won't effect your new business. Incorporating will protect you and your personal assets from creditors and lawsuits.
2007-04-24 18:25:29 · answer #5 · answered by dorwin29 3 · 0⤊ 0⤋
Not really. The IRS can't come in and take the business assets if they put a lien on your personal property. But you own the stock of the company, so it is an asset you own. So instead of taking a copier or business vehicle, they just take the company stock from you and own the whole business.
2007-04-21 11:10:50 · answer #6 · answered by Brian G 6 · 4⤊ 1⤋
This video might help you it helped
alot of others
http://video.google.com/videoplay?docid=-4312730277175242198%20&q=america+freedom+to+facisim&hl=en
2007-04-23 14:57:59 · answer #7 · answered by Shangrala 2 · 0⤊ 0⤋
Yes...because of the limited liabilities of Corp's.
2007-04-21 11:09:23 · answer #8 · answered by thinkpinkooo 3 · 0⤊ 2⤋