When it’s time to actually incorporate your company, you really don’t want to waste time. The truth is that if you really want to get the most favorable terms from the IRS, you will need to incorporate as soon as possible. Of course, you can actually incorporate later but you might end up running out of time to really get things done. Then you’re stuck paying a lot more to the IRS and even filing multiple tax returns. If you incorporate later in the tax year, you will need to file a return for the sole proprietorship and also for the company that you held. It can really add a lot of time to your tax preparation, but it’s very important to get this right. If you don’t claim all of the income, the IRS can get you later on for documentation. If you haven’t saved the documentation, then you can end up not only paying back taxes, but fees and penalties. This is just not what you really want to deal with. Getting subject to backup withholding is very costly, but other businesses definitely engage in the practice quite often.
The best thing that you can do is to make sure that you get a lawyer. Now, in today’s DIY culture getting a lawyer to incorporate your business is something that’s considered old and outdated. You can always download the forms to file with your state’s Secretary of State, and you can even download the IRS tax form to become a closely held S corporation. It’s just a matter of knuckling down and getting started, which means that you will need to decide first on the lawyer.
Something as critical as incorporation should be handled by a lawyer. They will have the expertise to not only incorporate your company, but make sure that you avoid mistakes that could make it harder for you to sell the company to someone else, or to have someone come in and invest in your business. If you’re determined to DIY, then you have to also accept some of the consequences that could come from filing the paperwork wrong.
If you have decided to actually go with getting help with your business incorporation, then you need to figure out how to get a lawyer on your side.
Going online is one of the best ways to look for lawyers that handle incorporation matters in your state. This is an important distinction because lawyers don’t really have a “global” status yet. If you need something handled in your state, you need to find an attorney that is licensed in your state. If you’re in Texas, you need to get a Texas lawyer to handle your business. If you’re in Florida, then a Florida business lawyer is really what you’re looking for. Why would you want to have an out of state lawyer handle your case and mess things up further?
If you want to incorporate in a tax shelter state like Wyoming, Delaware or Nevada, then you still need to find a lawyer in that state. However, you might also want to get a lawyer in your state as well so they can handle any foreign corporation matters that come up. Since you will have a bank account that needs to get opened as well, it’s important to think about all of the little details.
Send an email to the law firm that you find that handles business incorporations in your state. It’s good to have a set plan of action that you want implemented. For example, it’s not just enough to say that you want to incorporate your business. Do you know what type of business structure that you want to set up? Of course, if you don’t know this information then you should definitely say so in order to give the lawyer an idea of where to actually begin.
Overall, it’s a good idea to have a lawyer incorporate your business. This gives you legal protection from liability, as long as your business is actually run as a business. The IRS likes to also see you incorporate your business, as it’s a sign that you’re really trying to run a business and not just a hobby. They are taxed quite differently, and running a business has lots of tax benefits. Protect your tax benefits and your assets by incorporating a business today!