When starting a business, there are steps to take in fulfilling legal, state and federal requirements. The business structure you choose determines whether you will incur double taxation or make savings by paying less in taxes.
We’re talking to Cory Johnson from Cory W. Johnson, CPA, LLC which is located in Silver Spring, Maryland. Originally from Baltimore, he graduated from Temple University in Philadelphia with a BBA in accounting and then worked as an accountant and auditor for Aramark, Grant Thornton LLP, and KPMG. He is currently an accountant with The Architect of the Capitol which is a federal government legislative branch agency.
Starting a Business – Key Points
- Start with an operating agreement or bylaws.
- File your organizing documents in your state of residence or where you want your business to be incorporated.
- Before you launch your business, obtain a federal employer identification number from the IRS.
- Clients often don’t have the tools to keep accurate financial records and are unaware of how their business will affect personal taxes.
- Sole proprietors end up being double-taxed on the same net profit: at the individual income tax rate as well as self-employment tax.
- Partnerships also incur double taxation.
- Most people prefer to get professional help to handle tax papers and IRS documents.
- The LLC is the most commonly used business structure because of the tax benefit.
- Cory and Hans go through an example of how you pay less tax with an LLC-S Corp compared to a sole proprietor or general partnership.
Tune in for a high-level discussion on getting your business started.
- Cory W. Johnson, CPA, LLC
- Email: info@cpacory.com
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