This is an interesting article. I have been in the tax business for years and I love it. It can be hard starting a tax business and becoming an entrepreneur. If this is a desire of yours and starting your own free tax Preparationbusiness is something you would like to do then it is very crucial to talk to an experienced tax preparation business because they can help you manage and marketing your company.
In the business terms it is pretty obvious things to be concern about the things to make profit. I am really interested to use these things for the development of the business.
November 29, 2017 at 4:53 AM
For federal tax classification purposes, a business is classified as either a "business entity," which is any entity recognized for federal tax purposes; or a "disregarded entity," which is any entity not recognized or treated separate from its owner for tax purposes. The most common federal tax business entities include a C-Corporation, S-Corporation, and Partnership. Various rules under the Internal Revenue Code determine how a business is treated for federal tax purposes.
The default tax classification for a corporate entity is a C-Corporation. Alternatively, a corporation can elect to be taxed as an S-Corporation by filing Form 2553 with the IRS and meeting certain requirements.
A single-member limited liability company is the only state-formed entity eligible to be classified as a disregarded entity; this is the default classification. The one exception is where a business is owned equally by a husband and wife in a community property state; this business can also be treated as a disregarded entity. A single-member LLC can also elect to be taxed as a C-Corporation by filing Form 8832 with the IRS; alternatively, it can elect to be taxed as an S-Corporation by filing Form 2553.
The default tax classification for non-corporate, multi-member legal entities (including LLCs and state-law partnerships) is a partnership. A multi-member business may elect to be taxed as a C-Corporation or an S-Corporation in the same manner as a single-member LLC. One of the prerequisites for S-Corporation status is a single class of interest, disregarding differences in voting rights; multi-member LLCs with one class of interest or general partnerships can meet the requirements to be treated as an S-Corporation.
The following chart summarizes these rules:
State-Law Entity
Corporation
Single-Member LLC
Multi-Member Eligible Entity
Disregarded
No
Yes
No*
Partnership (Form 1065)
No
No
Yes
C-Corporation (Form 1120)
Yes
Yes
Yes
S-Corporation (Form 1120S)
Yes
Yes
Yes**
*A business owned equally by a husband and wife in a community property state can be treated as a disregarded entity.
**Only certain entities, such as multi-member LLCs with one class of interest and general partnerships, can qualify for S-Corporation status.
posted by Sterling Olander at 10:26 PM on Dec 22, 2013
"Federal Tax Classifications for Business Entities"
4 Comments -
The schedule is not very well orgainized on slecting the catory that your business is.
Chris
Owner
CEL Financial Services
Tax Return Preparer
http://directory.wfaa.com/biz/cel-financial-services-fillmore-income-tax-preparation/fillmore/ca/93015/40261586
December 31, 2013 at 11:54 PM
This is an interesting article. I have been in the tax business for years and I love it. It can be hard starting a tax business and becoming an entrepreneur. If this is a desire of yours and starting your own free tax Preparationbusiness is something you would like to do then it is very crucial to talk to an experienced tax preparation business because they can help you manage and marketing your company.
January 4, 2014 at 4:24 AM
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January 17, 2014 at 12:38 AM
In the business terms it is pretty obvious things to be concern about the things to make profit. I am really interested to use these things for the development of the business.
November 29, 2017 at 4:53 AM