Tax Trap #1: Waiting to Incorporate: What A Difference A Date Can Make
NOTE: This is the first in a series of 5 articles:"Small Business Tax Traps and How To Avoid Them"If you're a sole proprietor, perhaps you've consideredincorporating your small business or self-employmentactivity.And so maybe you've been wondering,"When is the best time to incorporate?"From a legal standpoint, any time is the best time.The sooner you incorporate, the sooner you make the movefrom the world of unlimited liability to the world oflimited liability.From a tax savings standpoint, any time is the best time.The sooner you incorporate, the sooner you will startputting more money in your own pocket and less in Uncle Sam's.(For more about the potential tax savings of acorporation, see the second article in this series --"Tax Trap #2: Double Taxation -- Isn't Once Enough?"http://www.YouSaveOnTaxes.com/tax-trap-2.html)But from a **tax reporting** standpoint, there is one timeof year that stands out as best: January 1st.Why is that?Assuming you have a sole proprietorship (or other entity,such as a partnership) that is up and running as of January 1, and assuming you then incorporate thatexisting entity on any date other than January 1,you face the possibility of filing not one buttwo business income tax returns for that year.Here's an example to clarify this important point . . .Let's say you've been operating your sole proprietorshipfor a few years, and in early 2005 you decide to incorporate. In January you get around to startingthe paperwork, but life gets in the way andyou finally get it done in late February. By the timeyour state processes the Articles of Incorporation,the start date of your new corporation is March 1.For 2005, you must file a Schedule C for the periodof January 1 through February 28, when your businesswas still a Sole Proprietorship.
And you must alsofile a corporate income tax return for March 1 throughDecember 31.Maybe that's no big deal. Maybe you enjoy filingone business income tax return so much, filinga second one doesn't bother you. And it may bethat the inconvenience of filing two tax returnsin 2005 is far outweighed by the legal and taxadvantages of incorporating.Keep in mind, too, that 2005 will be the only yearyou have to do this "double duty". In 2006 youwill only have to file the corporate income tax return.But if you are thinking about incorporating, thebest time to do it, from a tax paperwork standpoint,is as of January 1. Only then do you have a "clean break"from the old sole proprietorship to the newcorporation.This timing issue can also be relevant if youdecide to make the switch late in the year.
Ifthe effective date of the incorporation is November 15,you will have to file a Schedule C for January 1through November 14, and a corporate return forNovember 15 through December 31. In that scenario,you should ask yourself, "Do the benefits ofincorporating outweigh the convenience of waitinguntil January 1?"So before you decide when to incorporate, take a momentto reflect on the tax reporting consequences of incorporating on January 1 vs. any other date.Sometimes it may make sense to wait a few weeks(as in the second example), and sometimes it makes senseto "do it now", especially when January 1 is nearby..
Wayne M. Davies is author of 3 tax-slashing eBooks forthe self-employed, available separately or as a 3-volumeset, "The Ultimate Small Business Tax Reduction Guide".http://www.YouSaveOnTaxes.com/ultimate-guideTo get your free copy of Wayne's 25-page report,"How To Instantly Double Your Deductions" visit:http://www.YouSaveOnTaxes.comTop 7 Small Business Tax Tips
Top 7 Small Business Tax Tips
by J. Stephen PopeHere are seven ways for owners of small businesses to save money on their taxes.1.
Incorporate Yourself: If you're still a proprietor or partner of a business, it's time to incorporate yourself.
Not only will you limit your liability, but you may enjoy lower tax rates on small business income and other tax advantages as well. 2.
Be Home Based: If possible, continue (or switch to) being a home based business.
Not only will you keep your overhead down, but you will be able to write-off (or deduct) the business use of your home.3.
Income Split: Pay reasonable wages to your spouse and children. In this way, you can legally divert income taxed at your higher rate to your family members that are in a lower tax bracket.4.
Rearrange Your Affairs For Maximum Tax Savings: Can you make some changes to turn your hobby into a moneymaking business? Can you use that extra room in your house...
Incorporate > Top 7 Small Business Tax Tips
HomeDepot.com, OfficeDepot.com and Now RelaxDepot.com
(ContentDesk) June 14, 2004 -- We all know that when it comes to Home improvement on the web there's basically one place to go and that's HomeDepot.com. When it comes to office supplies the address is OfficeDepot.com. But where does one go to purchase relaxation and anti-stress products? Very simple: RelaxDepot.com. We are bombarded day in and day out how stress is the silent killer, how stress is the springboard for a whole host of illnesses and diseases. What can we do to eradicate stress from our lives?
By learning to incorporate relaxation into our lifestyle.
Not everyone is mechanically inclined...not everyone sits at an office desk, but we all could use a large dose of relaxation in our lives. RelaxDepot.com is the Superstore on the Web that carries everything for a stress free lifestyle. From Dead Sea products to massage aides, yoga to bath products. Books, CD's, DVD's, and a plethora of other products and services. We ship directly from our warehouse and most...
HomeDepot.com, OfficeDepot.com and Now RelaxDepot.com
Incorporate > HomeDepot.com, OfficeDepot.com and Now RelaxDepot.com
Starting an Exercise Program
You know you need to exercise but have no idea how to start. What exercises will work the best for you? How much physical movement do you need? How do you find the time in your busy schedule to start an exercise routine?
If you have been inactive for a long time, consult with your doctor before you attempt any exercise program. Set a practical, sensible goal, one that is reachable for you. If you cannot exercise every day, do not worry, any physical movement is better than none and will benefit your body.
HOW MUCH EXERCISE:
How much exercise is reasonable and how much do you need?
A good goal for most people is to exercise at least every other day and spend at least 30-60 minutes doing it. However, if you are just starting out, DO NOT attempt 30-60 minutes.
STARTING OUT:
Start out slowly! You cannot expect to easily workout for 60 minutes if you have lived a sedentary lifestyle...
Incorporate > Starting an Exercise Program
HomeDepot.com, OfficeDepot.com and Now RelaxDepot.com
(ContentDesk) June 14, 2004 -- We all know that when it comes to Home improvement on the web there's basically one place to go and that's HomeDepot.com. When it comes to office supplies the address is OfficeDepot.com. But where does one go to purchase relaxation and anti-stress products? Very simple: RelaxDepot.com. We are bombarded day in and day out how stress is the silent killer, how stress is the springboard for a whole host of illnesses and diseases. What can we do to eradicate stress from our lives?
By learning to incorporate relaxation into our lifestyle.
Not everyone is mechanically inclined...not everyone sits at an office desk, but we all could use a large dose of relaxation in our lives. RelaxDepot.com is the Superstore on the Web that carries everything for a stress free lifestyle. From Dead Sea products to massage aides, yoga to bath products. Books, CD's, DVD's, and a plethora of other products and services. We ship directly from our warehouse and most...
HomeDepot.com, OfficeDepot.com and Now RelaxDepot.com
Incorporate > HomeDepot.com, OfficeDepot.com and Now RelaxDepot.com
Death of the search engine? - Arelis finds a new home
It was only a matter of time before an effective tactic was developed to gain widespread competitive advantage from the increasing reliance placed upon links and link text by the major search engines. Simplicity itself, the technique involves using a version of arelis (http://arelis.org/arelis.html) in a radically new and different way.The technique currently sweeping the market has gained proven competitor advantage and with the utlilization of existing technology in a clever and unique way, takes only minutes to perform. The danger lies in that its use may become so widespread that websites will no longer be obtaining a tactical advantage, they will require its use to exist in the world of free search engine traffic.Arelis allows users to download pages of links, categorise these links, automatically produce link pages based upon them and provide webmasters with the contact address for each site on the link page.This combination...
Death of the search engine? - Arelis finds a new home
Incorporate > Death of the search engine? - Arelis finds a new home
How To Incoporate Practical Magic Into Your Daily Life!
More and more people these days are turning to witchcraft, paganism and wiccan spiritual practices as more meaningful and inclusive forms of religion. Since the printing of Gerald Gardner's Witchcraft Today, thousands have discovered the power it can have.
Although we live in a highly modernized, technological world, the ancient wisdom and knowledge that is imparted through witchcraft is still relevant today, if in fact even more so, since it is a peaceful, inclusive and deeply conscious tradition, that reveres the earth and earthly cycles. In this day and age, which is dominated by war and wanton environmental destruction, witchcraft offers a gentle nonviolent alternative way of making sense of our world.
Some people sadly, fear witchcraft because they wrongly associate it with the dark arts of Satanism.
This is a grave misconception, which witches everywhere are seeking to dispel. According to Gardner, contrary to the popular perceptions,...
How To Incoporate Practical Magic Into Your Daily Life!
Incorporate > How To Incoporate Practical Magic Into Your Daily Life!
Tax Trap #1: Waiting to Incorporate: What A Difference A Date Can Make furniture
Tax Trap #1: Waiting to Incorporate: What A Difference A Date Can Make Incorporate
Tax Trap #1: Waiting to Incorporate: What A Difference A Date Can Make Incorporate suv
Tax Trap #1: Waiting to Incorporate: What A Difference A Date Can Make
Tax Trap #1: Waiting to Incorporate: What A Difference A Date Can Make forex
Tax Trap #1: Waiting to Incorporate: What A Difference A Date Can Make
Computer Printer Ink Facts
Computer printer ink is a type of ink that comes from printers that will release small droplets of ink onto paper. Virtually all modern printers now use color ink. The cheaper color printers will use a combination of three colors, and these are magenta, cyan, and yellow, and they will also print black as well. The three primary colors are used to create the wide variety of colors that can be found in nature. Some printers will use ink that is based on CMYK to make sure the color black is pure...
Tax Trap #1: Waiting to Incorporate: What A Difference A Date Can Make
Incorporate > Computer Printer Ink Facts
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