1 owner,1 truck with 10K in tools
2007-08-21 11:26:22 · 3 answers · asked by Solutions 2 in Business & Finance ➔ Taxes ➔ United States
There are only two entity types that pay tax directly: Individual and "C-Corporation". Sub-chapter S Corps & Partnerships both pass along any income or loss to the individual shareholders or partners.
As for LLC's, they are a state-licensed entity, and they must file with the IRS as either as an individual, S-Corp or C-Corp.
There are many opinions regarding the best entity, typical arguments center on liability issues. If you are the sole owner, then it really doesn't matter what your entity is - Whichever you choose, just make sure that you have adequate insurance coverages - Have very thorough conversations with your insurance agent and know what is covered and where you may be exposed.
2007-08-21 13:03:31 · answer #1 · answered by dkarlsenyh 3 · 0⤊ 0⤋
For a small entity the best form of ownership is Sole Proprietorship with appropiate insurance against liability. Until your business is going a very high volume of business you will find that every dollar that you "may" save with some other form, you will pay an attorney or a CPA a bunch of money in fees. In some states you pay as much as $800 in "annual tax" on your LLC, LP, LLP, S corp even if you don't have a dime in tax liability.
2007-08-22 00:03:45 · answer #2 · answered by ? 6 · 0⤊ 0⤋
If you are a new small business, go for the LLC (limited liability company). It is simple, has few requirements, limited liability, and no extra taxation. That is all you need right now. Contact an attorney to set it up. Set up costs are minimal.
2007-08-21 21:26:38 · answer #3 · answered by Bibs 7 · 0⤊ 0⤋