Business Formation
The most frequently asked tax questions related to Business Formation
How does a Single Member LLC file its tax return?
Asked Tuesday, January 03, 2012 by an anonymous userCPA Answer:
A single member LLC files as a disregarded entity on a Schedule C. It does not file as a Form 1065 Partnership tax return.
Are there citizen requirements for LLC's?
Asked Tuesday, January 03, 2012 by an anonymous userCPA Answer:
No. There are no citizen requirements for LLC's, Limited partnerships, Sole Proprietorships or S Corporations. There are citizen requirements for S Corporations.
Is there a limit on the number of owners a LLC has?
Asked Tuesday, January 03, 2012 by an anonymous userCPA Answer:
No. There is no limit on the number of owners (members) for a LLC or a Limited partnership or a C Corporation. There are limits for S Corporations and Sole Proprietorships.
Sole Proprietorship - Schedule C
What Form does a Sole Proprietor file?
Asked Tuesday, January 03, 2012 by an anonymous userCPA Answer:
You would file a separate Schedule C with Form 1040 for every different business you are involved in which is not incorporated or a multi member LLC.
Sole Proprietorship - Schedule C
Can my wife and I file on one Schedule C?
Asked Tuesday, January 03, 2012 by an anonymous userCPA Answer:
A married couple filing jointly can file on 1 Schedule C instead of filing a partnership tax return.
Sole Proprietorship - Schedule C
Statutory Employee reporting
Asked Tuesday, January 03, 2012 by an anonymous userCPA Answer:
Statutory employees report their income and expenses on Schedule C instead of as miscellaneous deductions on Schedule A subject to the 2% AJI floor limitation.
Generally, statutory employees are full time life insurance salespersons, full time traveling sales persons and pieceworkers.
Generally, statutory employees are full time life insurance salespersons, full time traveling sales persons and pieceworkers.
What are some disadvantages of selecting to be a Partnership compared to other entities?
Asked Tuesday, January 03, 2012 by an anonymous userCPA Answer:
Just as in a sole proprietorship, partners are still responsible for unlimited liability, both personal and business. Therefore, everything you own is at risk. Also, you cannot make certain important business decisions without the agreement of the partner.
A general partnership offers few tax benefits to business owners.
How many shareholders can an S Corporation include?
Asked Tuesday, January 03, 2012 by an anonymous userCPA Answer:
An S corporation can have no more than 75 shareholders. None of the shareholders can be nonresident aliens.
S Corporation - include a nonresident alien?
Asked Tuesday, January 03, 2012 by an anonymous userCPA Answer:
None of the shareholders can be nonresident aliens.