How does the legal structure of a business affect taxes?
This can be very simple or very complex. It really depends on how many owners there are, what the filing status is with the IRS, and what type of entity you have. Do you have an LLC, partnership, or corporation ? Are there multiple owners? Are there different classifications of owners? Are there stock options? What is the value? Is the entity registered with the IRS as a partnership, S-corporation, C-corporation, or pass-through? When we think of businesses, we usually picture the typical corporation: a person or group of people who have created an enterprise that they hope will make money. However, this is only one of the many legal structures available to a business , and how they are taxed can be even more varied depending on how it is set up. Depending on where you are, you should probably speak with an accountant, tax advisor, or attorney . When you're starting out, it's easy to think of your business as a sole proprietorship or partnership. After all, that's ...