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Taxes and Incorporation Taxes in General
General Tax Per the Supreme Court and the IRS Code, you have the social responsibility to minimize your tax liability. The IRS does not like to pay interest on the money it owes You that it may find in an audit. General Tax All reasonable expenses (salaries, insurance, travel, education, to name a few) are deductible from corporate income reducing the federal tax burden on your business for C type incorporations. General Tax You may have the incorporated or Limited Liability company provide medical insurance to all (or all one of you) the employees- A 100 percent deduction of pre-tax revenue. General Tax The IRS audits only one Incorporated business for every Five Sole Proprietorships that make less than $1millon/yr. General Tax Relieve your family of estate taxes, a corporation does not die. Consider the advantage of avoiding probate litigation. Forming a corporation is much easier than setting up a trust and passing it on to your loved ones. Can the par value of stock of a stock be at near zero value? Just how much stock can you buy for ONE Dollar? Can the IRS tax a Gift of no value? Nevada Tax Nevada does not collect income taxes on it Corporation or its individuals. Nevada Tax Nevada is the only state that does not exchange tax information with the IRS because it dose not keep that Kind of information on its citizens, or its Incorporated entities. Sole Proprietorship and Partnership Taxes Federal taxation on sole proprietorship (self employment tax) is 15% in addition to the income taxes you pay. If you are making a profit, and show it on your tax forms (lets say to qualify for a loan from the bank) you are going to pay much higher taxes. If your state collects those same taxes also, get ready for a limited lifestyle. Remember Nevada does not tax its individuals or it Incorporated businesses. C-Corp Taxes: Remember that per the IRS, the C-Corp is taxed on its income as though it was a person, so are the funds distributed by the C-Corp (Your Dividends). You Get Taxed Twice. Through the deductions that may be available to you, you might be able to reduce the corporations tax burden. S-Corp Taxes: By selecting the S-Corp option you can eliminate the double taxation. The taxes are passed to the shareholders (pass through) upon distribution. (What happens if there is no distribution?) S-Corp Taxes The S-Corp does permit certain deductions and losses to be passed to the shareholders. S-Corp Taxes Use the Corporation to get things on credit- pay yourself $20K/year and you may qualify for the earned income credit. Caution- the property owned by the Corp is at risk. S-Corp Taxes Remember that because the state of Nevada does not collect taxes on corporate income, the S-Corporation is only of value for filing IRS taxes, and that status is granted by the IRS. LLC Taxes: With IRS recognition of one member LLCs, you qualify for pass-through taxation enjoyed by an S-Corp. |