What steps to make to change company name

Bill, What is the advantage of a S filing? I have read and only thing I found is
you may pay less payroll tax? I've never paid payroll tax per se. I always just file at end of year and pay on whats left at bottom line. Passing the profits through to shareholdrs(owners/s), you are still taxed.
In all my years of self employment I never wrote myself a check. I just spent money when I wanted or needed something and filed once a year.Theres no real protection from liability in a corp. anymore when it's small. It seems like more of a way to spend extra money and file out more papers?
This maybe something I may want to look into in the future.

 

The debt will carryover until you get big enough that it want matter anyway.
Having a bigger down payment is the easiest way into a house now.
We saved nearly 20% down five years ago and moved into a brand new house. Plus the more you pay down the smaller your monthlys are.
Planning is the key to getting into a house and affording it.

 

I formed a C-corp due to some unique tax requirements I have (on the advice of a tax attorney). I've heard that the main benefit of an S-corp is the ability to handle it with your personal income taxes. Usually this is easier for most small businesses.

 

When you incorporate a business entity, it is a C corporation. You file an S election with the IRS which makes your corporation an S corporation. There are advantages and disadvantages to both structures. A regular corporation pays taxes on profits. Dividends paid to shareholders are then taxed again. So, you can pay taxes twice using a standard C corporation. With an S election or S corporation, any dividends can be passed along to shareholders, like in a partnership, without the corporation having to pay taxes on any earnings. The shareholders then pay taxes on their share of any profits.

Depending on how you compensate yourself under a corporate structure, you could pay less taxes. We pay social security taxes only on wages. You can pay yourself a salary that you establish and then pay the balance of any profits as dividends. You won't pay social security taxes on any dividends since they are not considered earned income. Earned income is your salary or wages.

If you remain a proprietorship you will pay self employment taxes on any profits. Anything left over after all expenses are consider income under a proprietorship and you will pay social security taxes on anything that is left after expenses. That is different than if you have a corporation.

You need to talk to a tax professional (CPA or tax attorney) before you decide which way you may want to go. Everyone has a different tax situation. I have owned C and S corporations. An S corporation is usually better for most smaller owners, but not all. You can incorporate and then decide which way you want to go with the S election. But, I would still seek the advice of a tax professional. They can better advise you based upon your particular situation.

 

The S is just a filing election and just about anyone can do it. sole owner, partnership, Llc. or a Inc. Most people think you have no liabilaty
just cause you incorparate thats wrong. It also don't give some new found credit line either, No real benifit I could see for a small bussiness owner.

 

The sub chapter election is only for corporations. Anyone who owns a corporation can file the election. But, there are time constraints as to when it may be filed, as I recall. There are a number of benefits to having a formal structure to a business. You will have some limited protections from litigation, but often attorney's will file suite against the officers just to force a settlement. Still, there are some protections as long as you do things the right way. Having a formal business structure just makes it easy to keep personal and business separate. Having a corporation does offer some tax benefits, as well. It can help you to get business lines of credit once you establish your business. That could be important when the time comes to expand. Lenders don't usually offer business lines of credit to individuals or proprietorships. You may or may not need to offer a personal guarantee on any business loans. In any case, it won't usually count against you on your personal credit if you have a corporation. You may be able to get a home equity loan or purchase equipment in your personal name, but that could limit your ability to borrow in the future due to the way the credit scores work.

A corporation is also beneficial in setting up a retirement program. You can set up your own 401k under a standard corporate setup. I don't recall if it is available with the sub chapter s election. There are some restrictions. I would need to do a little research to find some of the differences. I believe that you are pretty much limited to an IRA as a proprietor.

I am not going to try to sell you on incorporating. I have friends who continue to operate as a proprietorship. A corporate structure works well for me and I pay less in taxes than if I operated as a sole proprietorship. There is a little more paperwork, but that is minimal. It costs me a little over $100/year to maintain my corporations. I save many times that in taxes. One of my friends who operates as a sole proprietorship will pay over $20,000 this year in taxes. If he were incorporated he would likely not pay half that amount.

Since every taxpayer is different, it is always best to check with a tax professional before making a decision. Perhaps a sole proprietorship is best for you.

 

Last year I paid less than a 1,000.00 so it will be a minute before I need S corp. If your a smal corp. You liabilty expourse isn't really any less than a
sole owner. Heres how: legally you're responsible for all things within the scope of your job and if you're small the whole job is your scope.
I filed once against a small corp. judge ruled they all stayed in.
I was offered a settlement shortly afterwards. Operating one truck or two just from what I've read there isn't any real savings. You can set up a retirement plan with any type of bussiness. There again maybe I'm making a lot less money than everyone else. The average driver pay a year best I can find is 35,000 -39,000. Now thats not what everyone makes, cause I know there will be those who make claims otherwise. But given 39,000 you're not going to owe taxes on but 22,000 as personal exemtion is 17,000 your social security will be 5800 and unless I'm wrong you're still going to have to pay that. At 39,000 I don't think you'll get any benifit? You'd be better off buying another truck or trailer for deducting.