Advice Please: What are the tax benefits for incorporating my coffee business ??

[tezin]

Hi There,

I hope everyone here is OK. I'm looking for someone to clear some of my doubts. I don't know whether this is the right platform to ask this.
I had started a coffee business as the sole owner of it. I have got a pretty much profit from it than I expected, and it really helped my business grow. But the problem is, at the same time, my tax rate also raised. I discussed with my friend, and he told me about incorporating my business as it provides tax benefits. I searched online and felt that the process is quite complicated, and I'm not confident enough to make a decision. Some doubts that I have is about the cost of incorporating my business. How much would it be? Are there any downsides to converting a business from a sole proprietorship to incorporation? Are there any special cases in incorporating a coffee business? Can someone share your views here? It would be helpful.

Thanks!

 

[MntnMan62]

I suggest you put your "business in an LLC. That's a Limited Liability Corporation. It's most important attribute is that any claims against the business cannot be made against your as a person. So, if you go under and owe more to other people than the business has coming in and you decide to shut it down, they can't come after your personal assets. In addition, if someone like Kramer from Seinfeld comes into your shop and spills hot coffee all over himself and then hires Jackie Chiles as his attorney to sue you for millions, and lets say they win. They can only go after the assets of your LLC and not you personally. There could be other tax benefits that an accountant could elaborate upon. My wife's business is in an LLC and our ownership of an office building is in an LLC. It's easy to set up and doesn't cost much. The hardest part is coming up with a name for it.

 

[Rustlen]

Actually, I also think that putting your business into Limited Liability Corporation, is a waaaaay better option actually. If you register it as LLC you are going to get a hell a lot of benefits out of it, I actually consider that it is the best possible choice for out country. The only problem is the accounting, you really need a damn good accountant, and get ready for completing tons and tons of documents. Ohhh and the tax forms, I hate them .I have to complete the 941 form right now actually, and I have to tell you that it is one of the worst forms ever! Thankfully you can use the samples from https://941-form-gov.com/, as I had no idea how and what to write in there.