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What type of business is best for you? Here is a guide to help you make
an informed decision.

Sole Proprietorships
Businesses that operate without any incorporation leave owners liable for
financial and legal obligations of the business. These companies will not file
their own tax return, but rather report all business activity on their personal
return. Owners will pay income tax and self employment taxes on business
income.

C Corporation
A corporation is a separate legal entity from its owners. This means that
shareholders have no personal liability for the company’s financial obligations.
A corporation is taxed on its income directly at a corporate tax rate.
Shareholders pay taxes only on dividends or income they receive from the
business.

S Corporation
An S corporation is a C-corporation that has chosen an S-election from the
IRS. While still a separate legal entity, the business will not pay income taxes.
Instead shareholders are taxed on their share of income that the business
generates at their personal tax rate.

Limited Liability Company (LLC)
An LLC is similar to a corporation or a partnership. The LLC protects the
owners or members from personal liability, but for tax purposes it is treated as
a non business entity for tax purposes as the IRS does not recognize the LLC
as a corporate entity.  All income is processed on the owner's personal return.
Owners will pay federal income tax and self employment taxes on business
income. The business will not file a return unless an S-corp election has been
approved.
info@keepmybooks.net
Keep My Books, Inc.
Keep My Books, Inc.
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