The current recession has caused many to lose their jobs. In turn, many individuals who might be recently freed from the constraints of working for someone else now have the opportunity to become entrepreneurs and start their own company to support themselves.
For these new entrepreneurs, how to choose between an entity type LLC, Corporation, S-Corporation, LLP, Partnership or Sole-Proprietorship Self Employment is not always clear. The tax treatment of entity type chosen can have a substantial impact on an entrepreneur’s finances for the lifetime of the company. Therefore, it is often important to get the right guidance from the right professional – instead of the best price on a company formation online.
Setting up a new company with a qualified professional such a a certified public accountant may be available for almost the same cost (or less) than the online services once all the associated fees are added up such as rush processing, obtaining an EIN, S-election, etc. The benefit of using a CPA to form a new company is that you may get pointed in the right direction from the very beginning – instead of being stuck with a tax on the company operations that might have been otherwise legally avoidable!
Some states have state income taxes on company income while others like the State of Florida do not currently have a state income tax on most types of entities – with the exception being C-corporations. That leaves other entity types such as LLC’s and S-Corporations generally without any State of Florida Income Tax on the operating income!
Therefore, if a LLC or S-Corporation has operations which could be done exactly the same in the State of Florida vs. New York – the owners of that company would generally put more money in their pocket – after taxes – by operating the company and living in Florida vs. New York – simply by being in Florida since Florida has no state income tax for individuals nor for LLC or S-Corporation entity types ! It might be enough reason for a business owner to consider to literally move a company to the State of Florida from another state to eliminate state income tax on company profits legally! Relocation of a Company to the State of Florida from another state is one way to legally reduce or eliminate State Income Tax on profits.
See our Firm Video on Choice of Business Entity:
To Incorporate a New Business as well as for assistance with the tax considerations of Forming a New Company in the State of Florida or the Reorganization of a Company to the State of Florida from another state, please contact the accounting firm of David L Wrubel CPA PA:
Should you have questions or need Business or Individual Tax Advice, our firm may be contacted at:
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