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Tax and business structuring

by Ben Roy
7 replies
Can anyone recommend a good book on structuring businesses for optimal tax treatment? As I'm getting involved in different ventures with various partners, I want a little background on the best way to set everything up. Thanks!
#business #structuring #tax
  • Profile picture of the author BloggingPro
    I am not a tax accountant, but I have been told and read countless times that a corporation provides some of the best tax options. I myself am in the process of setting up an LLC for this year as I plan to really ramp up my online business dealings and an LLC is going to provide me with the best option at tax time in 2012...
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  • Profile picture of the author donhx
    Originally Posted by Ben Roy View Post

    Can anyone recommend a good book on structuring businesses for optimal tax treatment? As I'm getting involved in different ventures with various partners, I want a little background on the best way to set everything up. Thanks!
    I'd suggest you not get a book... get a good business lawyer and accountant in your local area. They cost, but they pay. They can keep you up-to-date in ways that books cannot do. Plus, they understand your specific situation, and a book can only be general in advice offered.
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  • Profile picture of the author Scott Million
    I'm an S corp and love it. Might have done LLC but my State required I pay for 6 business announcement publications over the course of 3 weeks in local papers.

    Not sure on LLC, but with an S Corp you pay yourself a salary and everything extra is dividends (just pay federal on these... state income if your state has it.) You can also write off your health insurance, don't need to be 1099'd (might check the new laws for 2011, but you didn't need to 1099 an S Corp last year) ... there are certainly pro and con sites for LLC vs. S Corp but either are better than reporting through your personal income. Talk to an accountant, explain your business, and he'll lead you the right way.

    Also, shop around when you do want to incorporate or go LLC.... I paid waaay to much in legal and accounting fees (like a total of $1900) when I could have done it for $300-$500. Go to your local S.C.O.R.E. (free) and talk to an accountant who is a volunteer.
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  • Profile picture of the author Ben Roy
    Thanks for the feedback. I don't plan on a book being the final step - I just like to be educated before I step in with an accountant, etc.

    It's not simply a question of choosing between an LLC, corp, etc. I have multiple LLCs already with different partners, some businesses that are my own, and new ones on the way. So it's more about organizing the whole thing in a way that makes the most sense.
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    • Profile picture of the author Scott Million
      Originally Posted by Ben Roy View Post

      Thanks for the feedback. I don't plan on a book being the final step - I just like to be educated before I step in with an accountant, etc.

      It's not simply a question of choosing between an LLC, corp, etc. I have multiple LLCs already with different partners, some businesses that are my own, and new ones on the way. So it's more about organizing the whole thing in a way that makes the most sense.
      Gotchya, talk to an accountant for sure... what I do know is that S Corps are a very easy way to deal with share holders, partners, etc. They are structured for easy expansion, shareholders, and partnerships.
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  • Profile picture of the author kindsvater
    Roy, your post is so on-point for my latest site (see my sig if it is still showing the tax site banner - I rotate banners) some mod might think you were tee'ing me up.

    A recent section I just added explains that there is no single best business structure for tax and other purposes. Use them all.

    For example, I have a corp, sole proprietorship, and numerous partnerships.

    I like to be creative and to see all the pros and cons from various entities, and then take advantage of all the 'pros' by using the appropriate entity for various purposes.
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