Grow Their Money

AN EASY WAY FOR SMALL BUSINESS OWNERS TO KEEP AND GROW THEIR MONEY

Have you ever worked hard in your small business, and at the end of the year noticed you either broke even or were at a loss? One way to avoid a situation like this, that does not take any additional effort, is to ensure you choose the proper entity when starting your business. Different types of entities consist of Limited Liability Companies, C Corporations, and S Corporations (“S Corps”), to name a few. The most popular business entity in the U.S. are S Corps (as of 2019 there were nearly 5.2 million registered S Corps). Small business owners can elect to be taxed as an S Corp by filing Form 2553- Election by a Small Business Corporation, with the Internal Revenue Service, and must do so within 75 days of establishing their business (there are exceptions for late filers).

The S Corp is the most popular business entity because it is not subject to corporate income taxes or self-employment taxes; and the owners can transfer money out of the business tax free. I have personally seen business owners save thousands of dollars in taxes by legally avoiding the taxes stated above. It has been proven that having an S Corp saves the small business owner from hefty tax bills and has been doing so since first established in 1958, by President Dwight Eisenhower. Although S Corps may not benefit every business owner, I strongly encourage small business owners to explore this opportunity to see if this entity structure is the best for your company, so that you can keep and grow your money, by saving on taxes.

Written by: Angela F. Collie, CPA

AFC CPA Accounting & Tax Services 2500 Quantum Lakes Drive, Suite 203 Boynton Beach, FL 33426 561-336-5755 www.afccpa.com