With the tax season over, now is the time to plan ahead to next year and make changes that could positively impact your business taxes for 2011. One such change could be incorporating your business, said Nellie Akalp, CEO of CorpNet, an incorporation-filing service.
“If you’re self-employed operating as a sole proprietor, tax time can be yet another reminder that you haven’t addressed your business structure yet,” Akalp wrote for Small Business Trends. “Maybe you started your business as a side project, and a sole proprietorship made sense. But now, filling out that Schedule SE and paying all those self-employment taxes make you cringe. And maybe your tax advisor has mentioned that you could reduce your taxes by forming an S Corporation.”
Akalp offered three questions to ask yourself if you’re considering incorporating your business:
Are you looking to lower your payroll taxes? Do you want to protect your personal assets? When’s the right time to incorporate?
Consult your tax advisor or CPA when considering these questions. Once they’ve weighed in, and you feel ready to move forward.
“If you’re concerned about liability protection or your CPA is advising you to incorporate, there’s simply no reason to wait,” Akalp wrote. “Now’s a great time to invest a little effort in getting your legal structure squared away and your business set for many tax days to come.”
To read the complete Small Business Trends article, click here.