Business tax planning opportunities start the moment you decide to start your own business and never stop. Caudell & Associates can help.
Legal entity selection: Entities are formed at the state. Options include corporations, limited liability entities or partnerships. Many new businesses choose to operate without an entity. The choice of entity is really driven by your goals for your business, the legal environment in which your business will operate, and the number of owners. We love to get involved with clients from the beginning to make sure we maximize every tax opportunity and minimize future surprises.
S-Election: Every state organized entity has a default tax filing for federal tax purposes. Every entity has the option to make an S-Election for federal tax purposes. Your S-Election is a federal tax election that is independent of the entity you choose to form. An S-Election may be the right choice for you; however, S-Corporations have different employment tax requirements. We can help you decide if you should make your S-Election at formation or wait until later.
Business start-up: Tax treatment of start-up activities are affected by many factors, including your legal entity type, your federal tax status and even your industry. We help our clients understand their options and navigate the start-up period. We want you to be prepared rather than surprised at tax time.
Time asset purchases to get the best tax result.
Accelerate expenses or delay revenues.
Ongoing tax management: You can't effectively plan for taxes after the year is over. You need to pay attention to your tax obligation throughout the year to make sure you are prepared. Businesses expand and contract every year. If your tax plan is left on autopilot based on last year, you may end up with a big surprise when your return is filed. It's hard to impact your tax bill or adjust your tax deposits after the year is over. We work with our clients throughout the year to minimize surprises at tax time.
1120S Corporate Return is used by businesses which have made a subchapter S-election. This election has many benefits and is available to most forms of businesses.
1120 Corporate Return is used by incorporated businesses that have not made a subchapter S- Election.
1065 Partnership return is used by partnerships and multi-member LLCs that have not actively elected a different form.
1040 Schedule C of an individual return is used by unincorporated businesses or single member LLCs that have not made an S-Election.
State Income Tax: In Texas, all limited liability entities must file an annual franchise tax return. If you don't file this return, your entity will lose "good standing" and authorization to transact business in the state. This is easy to fix but it's even easier to avoid by filing the required return. We file Texas Franchise tax and other state income tax returns for our clients.
Payroll Taxes: Every employer is required to file quarterly Employment tax returns (941s) and annual Federal Unemployment tax returns (940s). You also must make periodic deposits of monies withheld from your employees' paychecks. Penalties for late payment of payroll taxes can be quite high. We encourage every employer to use a payroll system. A good system will significantly simplify your requirements as an employer.
Personal Property Tax: In Texas, businesses are required to file property tax renditions with their local appraisal district by April 1. If you don't tell the appraisal district what you own, they will create a figure and bill you according to their figure. We prepare personal property tax renditions for our business clients.
Sales Tax: Sales tax in Texas is incredibly complicated. If you sell products subject to sales tax, you must have a sales tax permit. You must collect sales tax from your client and make periodic deposits to the state. You must also file periodic sales tax returns with the state. The schedule for your tax deposits and returns is based on your history and can be monthly, quarterly, or annually.
The time to start thinking about this year's taxes is now.