We know all about starting a new business and everything that comes with it – the joys, the freedom, the stresses, and yes, the tax requirements.
So if you are starting your new business, we are here to help. Gold Standard Tax specializes in small businesses, and we want to make sure your business gets off to the right start.
Deducting expenses while starting up
Many new businesses think that they cannot start deducting expenses until they are up and running. However, the IRS acknowledges some start up expenses to be deductible. For example, some businesses can deduct investigational costs for researching products, deduct costs for training new employees, or costs related to attending seminars. Keep in mind that you can only deduct startup expenses for a viable new business entity and if you do not end up opening the business, the costs would be rendered personal, and you may not be able to deduct them.
Making estimated payments
If you are self-employed, or are filing as an S-corporation shareholder, proprietor, or partner, you are responsible for making quarterly estimated tax payments throughout the year. It is not necessary to make estimated payments within the first year of your business, as you would not yet have the estimated income. But after the first year, you can use the previous years to create an estimated tax payment each quarter. If you do not file at least 90% of of the taxes you would owe, you could be subjected to penalties.
Your taxes are affected by your legal entity
Each legal entity has different effects on your tax liabilities. Included in the different types of legal entities are LLCs, S corporations, sole proprietors, and partnerships. For example, C corporations have the option to deduct a larger scope of expenses and can also include hundreds of shareholders. However, these types of corporations are subject to double taxation. Thankfully, the #GoldenGirls are very well aware of all the different types of legal entity taxation effects and if you have any questions about your business, feel free to ask.
