Taxation of LLC’S

Taxation of LLC’s is sometimes misunderstood. All businesses no matter their legal structure must file an annual return. Sole proprietorships and corporations file an income tax return. Partnerships and S Corporations file and information return. These filings are not optional for these types of legal entities.

However, an LLC has several tax filing options it can adopt. An LLC with at least two members can choose to be classified for tax purposes as either a corporation or a partnership. If the LLC elects to be taxed as a partnership it will use IRS Form 1065 as an information return, and the income will be reported on the member’s personal form 1040. If the LLC elects to be treated as a corporation the entities income will be taxed prior to any dividends paid to the members and then taxation of the dividends or distributions once received as income will be taxed to the members.

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Determine Whether You Should Outsource Your Tax Reporting

By Jo Anne Killeen

It might be tempting to handle your tax reporting in-house, but it’s important to remember that you will sacrifice time that could be spent on running your business. Learn how to choose the best fit for your business’s tax reporting needs.

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Steps for Changing Business Structures: How to Switch Structures

At any point in time, a change in the way you do business, your business’ products and services or your business’ size may make switching your business structure necessary.

Here are a few points that you should be aware of if you are thinking of making such a change.

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Important Things to Remember About Your Corporate Taxes

Like it or not, every small business has to pay taxes and there won’t be much sympathy for a business that doesn’t file properly.

Let’s take a look at some of the most important things to keep in mind during tax time.

Deadlines

Without a doubt, the most important things you want to remember when it comes to paying your corporate taxes are the various deadlines that are imposed by the IRS.

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Hiring a Good Tax Professional Tips

If you have a small business, then make no mistake about it – you need a tax professional. Besides avoiding the stress come tax time, having your business taxes professionally prepared can keep the IRS off your tail.

To find a good tax professional, you need to find one who is efficient and honest - and who knows what he or she is doing. Here are 12 points to consider to ensure that you hire the best one for your business.

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Can I Qualify for a Business Loan?

Whether you are applying for an SBA loan or a traditional bank loan, there are certain factors that improve your ability to obtain financing. This self-test is designed to assist you in understanding important issues that lenders consider when making a decision on a small business loan.

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12-Point Business Tax Checklist

Before filing your business tax return or handing your details over to your tax professional, it is imperative that you organize all your information in such a way that filing returns and paying taxes becomes a whole lot easier.

Here are 12 things to do before you call your tax professional.

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BBB Explains Stimulus Package Benefits for Small-Business Owners

With President Obama signing into law the American Recovery and Reinvestment Act on February 17, many small-business owners are eagerly anticipating the benefits of the $787 billion economic stimulus plan. Better Business Bureau of Eastern North Carolina (www.bbb.org) is offering a summary of several small-business benefits.

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Tax-Time Tips For At-Home Workers

It is at least 1,000 pages long. It costs $787 billion. And it’s as thick as two telephone books.

The size and scope of President Obama’s stimulus package is staggering. But for many Americans who work at home, their concerns about the package can be reduced to one question: What’s in it for me?

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What we can do to stimulate job growth NOW . . .

I've heard from a lot of people regarding my blog post from Tuesday – – if you haven't read it go here to get up to speed. As promised what follows are my proposals that would dramatically stimulate job growth in America.

I propose Phase II – – a "Small Business Growth Act of 2009" to jumpstart our economy into the future. Let's start by incentivizing investments into new and successful small businesses. President Obama stated on the campaign trail that waiving capital gains for those investing in small businesses was noble public policy. But sadly, this provision was missing in the recent stimulus bill. So many politicians claim to be for small businesses, yet so many seem missing when real progress is needed (we saw this recently with our politicians including cuts in fees for SBA loans in the stimulus bill when it was an access to capital problem, not a cost of capital problem that should have been addressed).

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No small differences over Obama’s treatment of small business

Posted by: Richard Cowan

U.S. budgets can really bring out the passion in people. So much so that it’s no wonder it’s hard for anyone to agree on how Washington should tax and spend.

When it was released on Thursday, the budget President Barack Obama unveiled sparked a war of words all over the capital. The disagreements were so profound, it’s almost as if people were looking at two entirely different documents.

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New Tax Tips for Businesses

In these lean times, there's one move that's always smart--preserve your cash by making sure your business gets every tax deduction possible. It's not always easy to keep track of all the deductions you might qualify for because our tax code keeps changing.

Recently, the IRS released a list of 11 important changes that affect business tax returns for 2008. A few key changes:

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Small Business Taxes: Should You File Form 2553 By March 15?

This article is for small business owners who currently run their business as a C corporation or limited liability company (LLC). If you fall into either of those categories, read on to find out why filing Form 2553 by March 15 could be the best thing you do this year. Form 2553 is called "Election by a Small Business Corporation", and it is the form you must file with the IRS if you want to be taxed as an S corporation.

If you've been thinking about making the switch to S corporation status, now is the time to make a decision. Both C corporations and LLC's can avoid two notorious tax traps by becoming an S corporation. C corporations can avoid the dreaded double taxation of corporate profits because S corporation profits are only taxed once. And LLC owners who are currently being taxed as sole proprietorships or partnerships can reduce self-employment tax by paying themselves reasonable compensation as an employee of the S corporation.

The rules for filing Form 2553 on time are a bit tricky, so let's review them. If your C corporation or LLC was already in existence at the beginning of the year, the general rule is this: you must file Form 2553 by March 15, 2009 in order to be recognized as an S corporation as of January 1, 2009. If you file Form 2553 after March 15, 2009, you may have to wait until 2010 to receive S corporation status. One important note about the March 15 due date: since March 15, 2009 is a Sunday, you actually have until the next business day (Monday March 16) to file the form. If you form a C corporation or LLC anytime after January 1, you have 75 days from the incorporation date to file Form 2553 in order to be recognized as an S corporation as of the incorporation date.

Example: You incorporate on March 1, 2009. You must file Form 2553 within 75 days of March 1, 2009 in order to receive S corporation status effective March 1, 2009. Like any tax rule, there are exceptions to the general rule. So if you miss these filing dates of March 15 or 75 days from incorporation date, consult with a tax professional to determine whether you qualify for relief from the general rule. Also be sure to determine whether you qualify for S corporation status. Here are a few of those requirements:

1) The corporation cannot have more than 100 shareholders.

2) All shareholders must consent to becoming an S corporation, and demonstrate that consent by signing Form 2553.

3) Only domestic corporations can apply.

4) Each shareholder must be a U.S. citizen or a U.S. resident.

Source:http://www.articlesbase.com/finance-articles/small-business-taxes-should-you-file-form-2553-by-march-15-809615.html

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