A business entity is an entity that is a group of people organized for some profitable or charitable purpose. Business entities include organizations such as corporations, partnerships, charities, trusts, and other forms of organization. Business entities, just like individual persons, are subject to taxation and must file a tax return. Some business entities are exempt from federal income tax. These include non-profit charities, S-corporations, and partnerships. Business entities may be subject to state income tax, depending on the laws of the state or states where they conduct business.
The business entity—LLP, LLC, sole proprietorship, partnership, corporation, etc.— that you select for your business has enormous financial and tax implications. It is important that you make the right decision. We can explain each choice and its implications. As your business grows and changes, the type of business entity you choose may need to change also.
Five major types of business taxes are:
(1) income tax
(2) employment (withholding) tax
(3) excise tax
(4) corporate franchise tax
(5) sales & use tax
Preparing your own business tax return, especially for the first time, can be a frustrating experience if you don’t have all the necessary information at your fingertips. With the everchanging tax laws, Rink & Robinson, PLLC can eliminate those anxieties. We simply ascertain a list of the following items to begin the business tax preparation process.
- Last year’s business tax returns
- Articles of incorporation
- Partnership agreement
- Accounting records
- Bank statements
- Credit card statements
- Payroll reports
- Detail of asset purchases
- Depreciation schedules
- Detail of asset dispositions
- Vehicle information