An online learning course.
Business formation is also referred to as business structure or business organization by the governing bodies. Both terms align with accounting and business practices because organizing your business and creating a structure is based on your business. The business structure will determine reporting for Internal Revenue Service and state government bodies that charge taxes and fees based on your business structure and this is called external reporting. Because of this reporting requirement accountants work to set up processes that create accurate reports but we create the reports internal as inside your business for you the business owner(s) and for external reporting. A nice benefit of setting up reporting for internal and external reporting is also used to navigate your business. We can estimate taxes by using the processes we set up to help with the best business decisions.
Tax planning helps when you venture into new streams of income but some business types, services, or products have more taxes applied to them than others therefore people are surprised when they wait until the tax season to tell their accountant they started a new business stream. The accountant reviews and finds that stream of income will increase taxes. Most people are angry with the accountant although they never notified them of the changes.
Most people know the two primary business structures have business income taxes so most people believe they do not have any taxes. However, self-employment taxes are your business income taxes they are on different tax forms. So this is an example:
The goal is to create an internal process that navigates your business all while creating reports that help your business but also produce reports for external reporting. Your business structure determines your tax type and the tax forms you will file. Business structure impacts accounting in the way how we set up your chart of accounts, owner's pay, income taxes, and business taxes.
Since people are familiar with sole proprietorships and Limited Liability Companies LLC many do not know that one person can set up a corporation as well. Although there are various business structures too many to list, I focus on the most common business structures that work best for the business owner. I find that if you are going to open a large company with multiple partners or shareholders you are venturing into the deeper legal ground and should consult a large accounting firm and a lawyer. I work for the small business owner with about 1-2 business owners (normally husband and wife business owners or individual business owners) that are on one cord specifically the cord of life of YAH and that would mean they are both in agreement.
I find that attempting to own a business with multiple people or people that have different visions can pull the business into multiple directions. I have seen a business with 3 owners, but it legally belonged to one. There were 2 owners that decided they would work on an accounting system behind the back of the legal business owner and attempt to force this person into a different system they believed would work better. Thankfully, they did not like my offer, after they tried to trick me into some unreasonable pricing, and I was not a part of their trickery. I am glad they did not accept as I would not have accepted the account once I found out what they were doing because their plan was unethical.
Hopefully, you can see that selecting your business structure is important for your business. Your business structure will impact your accounting processes and taxes. Making sure you have efficient accounting processes will make it easier to pull together reporting information for monthly, quarterly, and annual tax filings. Your business structure is created by your type of industry because there are industry regulations for most business owners that require additional reporting that is gathered from your accounting records. Your business structure will help you understand how to set up your accounting file for better reporting. Bookkeeping is the flow-through of transactions and certain bookkeeping procedures are dictated by your business structure such as when its owners draw or when you process payroll. Can an LLC owner process payroll for themselves or using estimated tax payments? What if you are a one-person S-Corporation or C-Corporation. What? Can one person own a corporation? What products and services will you sell, and can you have an LLC, or do you need a Corporation? Did you know your business structure also impacts your income? If you have a flow-thru entity, you could pay more in taxes because of the AMT tax. What is a flow-through entity?
I will cover all those questions and more in the business formation course to assist you with setting up or modifying your business structure to best benefit you.
Many business owners select a business structure because of a catchy name or because someone else told them they should have this business structure because everyone they know has that business structure. However, ask them if they know there are different types of business structures and that your business structure determines how you file your business taxes? Did you know LLC – Limited Liability Corporation is flexible but why? Did you know you have to take additional steps to be considered a corporation although the corporation is the LLC designation?
Did you know you have more filing requirements, or you must have payroll with certain business structures? Did you know certain business structures provide more tax deductions and credits than other business structures, but their filing and annual reporting fees cost more? What if you have multiple businesses can you lump all your business under one business structure? I will cover many questions that the everyday small business owner does not have access to until tax season when they cannot understand their taxes. Why do you have penalties? Before you select your business structure or if you need to modify your business structure let us discuss your options. I hope I can also help you see why other options are not unattainable for even the everyday small business owner.
The course is $145.33 including tax NC Sales Tax. Sales tax is required as it is based on my location. You can also purchase this course per lesson. There are 3 lessons for $55.00 including NC Sales Tax per lesson. Once you are approved for the B&P Learning Center and your payment is received then the lessons are released.
Are you ready to gain a better comprehension of business structures? Learn more with this training course that you can use over and over on multiple businesses.
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