Corporation


CORPORATION BUSSINESS SET-UP, includes: Filing, Preparation of Corporate ByLaws: All Required Forms and Application for EIN:                                                 $600.00

Articles of Incorporation Filing Fee:                            ( State fee)                $100.00 

Initial Statement of Information Filing Fee:                (State fee)              $25.00

                                            Total: $725.00


NOTES:
  • Newly incorporated or qualified corporations are exempt from the $800 annual minimum franchise tax for their first year of business. Thereafter, the amount is payable annually whether the business is operational or not, profitable or not , as long as the corporation is active.
  • A corporation files a separate tax return from the individual owner/owners. It uses either IRS Form 1120 (C Corporation) or Form 1120S (S Corporation).
  • By default, all companies are C Corporations. To become an S Corporation, the business has to submit a request to the IRS. 
  • A C Corporation pays its income tax to the IRS. The individual owner/owners pay their personal taxes from their wages issued by the corporation. Hence, dubbed as double taxation.
  • If approved by the IRS, an S Corporation is a passive entity, meaning the corporation's net income is distributed proportionately to its shareholders. The corporation doesn't pay Federal income tax but  income is included in the shareholders individual tax returns.
  • If done right, a corporation protects the personal assets of its owners from claims and lawsuits since it's a separate entity from the individuals. Co-mingling of personal and business assets should be avoided at all costs.
  • With the passage of the Tax Cuts and Jobs Act (Trump Tax Plan) in 2018, the business is entitled to an additional 20% tax reduction from the net profit.

Limited Liability Company


LLC BUSSINESS SET-UP, includes: 

Filing, Preparation of LLC Operating Agreement, All Required Forms and Application for EIN:               $500.00

Articles of Organization Filing Fee: 

                             (State Fee)  $70.00 

Initial Statement of Information Filing Fee:    (State fee)                    $20.00

                                   Total: $590.00

NOTES:
  •  $800 Annual LLC tax to be paid immediately after registration with SOS, not included. An LLC pays a minimum franchise tax of $800 annually whether the business is operational or not, profitable or not , as long as the LLC is active.
  • An LLC files a separate tax return from the individual owner/owners. It uses IRS form 1065 of Form 1068.
  • An LLC is a passive entity, meaning the business'  net income is distributed proportionately to its partners. The LLC doesn't pay Federal income tax but income is included in the partners' individual tax returns.
  • If net income is at least $100,000, an LLC partner is subject to self-employment tax of 15.3%. This is where an S-Corporation is better.
  • If done right, an LLC could protect the personal assets of its owners from claims and lawsuits since it's a separate entity from the individuals.  
  • Co-mingling of personal and business assets should be avoided at all costs.
  • With the passage of the Tax Cuts and Jobs Act (Trump Tax Plan) in 2018, the business is entitled to an additional 20% tax reduction from the net profit.
  • An LLC needs to have at least two partners for the IRS to accept  net losses on a partner's tax return. A single-member LLC is treated  like a sole proprietorship for tax purposes- on the individual Schedule C of Form 1040 and is subject to the 15.3% self-employment tax.

Fictitious Business Name/DBA/

Sole Proprietorship


DOING BUSINESS AS (DBA), includes: Preparation of Fictitious Business Name Statement, County filing & fees and Newspaper publication for 4 weeks:                                                          $350.00

Notarization:                              $15.00

Total:                                     $365.00


NOTES:
  •  A fictitious business name statement expires five years from the date it is filed in the County Clerk. A renewal of a fictitious business name statement must be filed prior to the date of expiration if you intend to continue doing business under that name and if there are no changes from the original.
  • A DBA's  tax return is filed with the individual tax return on Schedule C. There are no annual franchise taxes for this business. However, any profit is subject to self-employment tax (15.3% of  net income) which goes towards the taxpayer's Medicare and Social Security contributions.
  • A DBA and the individual are the same entity, hence, the personal assets of the owner/owners could be subject to claims and lawsuits.
  • With the passage of the Tax Cuts and Jobs Act (Trump Tax Plan) in 2018, the business is entitled to an additional 20% tax reduction from the net profit.