Schon gewusst?

Schon gewusst?


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Music video by Jack Ingram performing That’s A Man. (C) 2009 Big Machine Records, LLC


Wird geladen…


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Schon gewusst?

Research & References of Schon gewusst?|A&C Accounting And Tax Services
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EIN For My One-Member LLC

Do I need to get an EIN (Employer ID Number) when I’m the only member of LLC?

One of the most important reasons that a business owner decides to establish LLC (Limited Liability Company) with only one member in the business is that they want to protect their personal assets from any loss that the business may cause.

Limited Liability Company is relatively easy to set up, but the tax payment is not as clear because there is no separate tax classification for LLC. The business owner of LLC should decide which tax classification they are going to file on: sole proprietorship, partnership, or corporation.

A single-member Limited Liability Company is classified as a “Disregarded Entity” by default, and treated as a sole proprietorship for income tax report.

One may file their business income on their personal tax return, Form 1040 using their Social Security Number (SSN) when they are the only member of their business. So why do we want to obtain EIN in this case?

Let’s say that I, a business owner whose LLC has only one member, myself, want to open a bank account for the business. They ask me if I want to use my SSN for my LLC business account. Well, the reason that I set up LLC was that I didn’t want to mix my personal assets with my business. So do I want to use my social security number to open a business account? Shouldn’t I make my business as a separate entity as possible to gain better protection against personal liability?

According to some reports, in certain circumstances, some courts may decide that an LLC didn’t practically exist and its owner ran the business as an individual rather than as an LLC when he or she has paid tax on their personal tax return.

Here is the summary of the benefits of using EIN over SSN for an single-member LLC.

For the above reasons, it’s advised that a business owner may acquire EIN from the IRS even for one-member LLC.

Acquiring EIN is very simple and takes less than 10 minutes.
Get an EIN for your single member LLC.

This post is not intended to constitute the rendering of legal, accounting, or other professional services or to serve as a substitute for such services.

By Russell, May 2, 2009 @ 11:38 am

I just received answers to some old business questions from your website. I understand the significant points of having an EIN now.

By Mass Kash Media, July 15, 2009 @ 7:00 pm

So if I’m receiving money from sources online that are going to 1099 me at the end of the year, is it better to give them my SSN or my LLC’s EIN. I’m a SMLLC so it’s only me that has to worry about paying any taxes as an employee.

By Misty Tolman, July 23, 2009 @ 10:47 pm

I was wondering…If I have a EIN under a sole proprietor and want to start another business and make my second business a LLC business do I need to apply for a second EIN?

By admin, October 12, 2009 @ 5:11 pm

You may need only one EIN, but I’d consult a CPA or tax advisor.

Hope this IRS publication helps:
http://www.irs.gov/pub/irs-pdf/p1635.pdf

>>You do not need a new EIN if any of the following are true:
>>• You change the name of your business
>>• You change your location or add locations (stores, plants, enterprises or branches
of the entity)
>>• You operate multiple businesses (including stores, plants, enterprises or branches
of the entity)

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Disregarded Entity Definition – What is a Disregarded Entity?

What is a disregarded entity?
A disregarded entity is a business entity which is considered to be an undivided part of the owner of the entity for federal tax purposes. That is, the entity is disregarded as an entity separate from the owner.

A good example of disregarded entities is a single member LLC that does not choose to be classified as a corporation for federal tax purposes. A single member limited liability company that is not classified as a corporation automatically defaults to a disregarded entity, and file federal income tax return as a sole proprietorship.

How does IRS treat a disregarded entity?
IRS does not require a disregarded entity to file a separate income tax return because the assets of the disregarded entity are considered as the assets of the owner of the entity. The entity is allowed to be taxed as a “pass-through” entity on its owner’s personal tax return. The income, deductions and loss of the disregarded entity are included in its owner’s return.

Why use a disregarded entity?
The owner of a single member LLC who does not want to pay additional federal income taxes for the business entity can choose to be a disregarded entity. That is, the owner of the disregarded entity just needs to file Schedule C with their personal income tax like a sole proprietorship.

This post is not intended to constitute the rendering of legal, accounting, or other professional services or to serve as a substitute for such services.

Source

Disregarded Entity Definition – What is a Disregarded Entity?

What is a disregarded entity?
A disregarded entity is a business entity which is considered to be an undivided part of the owner of the entity for federal tax purposes. That is, the entity is disregarded as an entity separate from the owner.

A good example of disregarded entities is a single member LLC that does not choose to be classified as a corporation for federal tax purposes. A single member limited liability company that is not classified as a corporation automatically defaults to a disregarded entity, and file federal income tax return as a sole proprietorship.

How does IRS treat a disregarded entity?
IRS does not require a disregarded entity to file a separate income tax return because the assets of the disregarded entity are considered as the assets of the owner of the entity. The entity is allowed to be taxed as a “pass-through” entity on its owner’s personal tax return. The income, deductions and loss of the disregarded entity are included in its owner’s return.

Why use a disregarded entity?
The owner of a single member LLC who does not want to pay additional federal income taxes for the business entity can choose to be a disregarded entity. That is, the owner of the disregarded entity just needs to file Schedule C with their personal income tax like a sole proprietorship.

This post is not intended to constitute the rendering of legal, accounting, or other professional services or to serve as a substitute for such services.

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How to Name Your Business

Make it informative and meaningful.
It’s easier to remember when your business name reminds customers of your goods or services. Make it meaningful and easy to remember.

Some experts vote for abstract names, but it will take more efforts to do efficient and creative marketing for it. Yet, when the business marketing is successful, the name will be more unique, hence it will leave a strong impression to people.

Consider to make it reflect your brand.

Consider names that reflect values, quality of products and services that your business provides. For example, Hearty Vitamin Shop sounds more health-oriented than Jenny’s Vitamin Shop.

Check domain availability.
More about how to choose domain name

Legal issues
If you’re setting a corporation , limited partnership or LLC, your business name should comply with state name rules. Also, remember to check trade name regulations.

Leave a room to expand.
This can be significant for some people and not for others. It can be a good idea to make your business broad enough to expand to other fields even though you don’t expect that to happen any time soon. If the name is too meaningful or too specific, you might need to set up a new business in case of expanding your business.

Consulting with naming professionals.
It’s a good idea to check with experts of naming companies. If you’re not sure about your idea or you think you need to clear up in regard to possible legal issues. Although it costs money, naming experts will guide you to make a solid decision. Another benefit of using naming firms is that experts will provide you with legal advice.

By Russell, May 2, 2009 @ 8:07 am

I just wanted to say Thany You Very Much! I have been looking for some good and free information. Your website has giving me hope to start an online business. I have two great ideas and no money.

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