Small Business Taxes For Dummies, 2nd Edition

Chapter 2

Making Important Business Decisions

IN THIS CHAPTER

Understanding why many businesses go “solo”

Assessing the incorporation decision

Surveying S corporations, partnerships, and limited liability companies

Recognizing the value of employee benefits

As a small business owner, you face many important decisions. This chapter deals with two big ones that come up in the early days, months, and years of your venture.

• First is the type of business entity you’ll operate under — sole proprietor, C or S corporation, limited liability company (LLC), and so on. This decision impacts the liability exposure you have, tax-reporting requirements, and income taxes you and your business will owe.
• The second is the benefits your business may consider for yourself and any employees.

SIDELINE BUSINESSES, TAX WRITE-OFFS, AND THE HOBBY LOSS RULES

Many supposed tax gurus state that you can slash your taxes simply by finding a product or service that you can sell on the side of your regular employment. The problem, they argue, is that as a regular wage earner who receives a paycheck from an ...