Business is such a vague term that doesn't really fit with the IRS formula. If only it were that simple. Business can be on three difference forms: a schedule C known as a Sole Proprietorship or a Limited Liability Company (LLC), they can be on a Form 1065 as a partnership or a S-corporation, and lastly they can be on a Form 1120 also know as a corporate tax return. Now a sole proprietorship and partnerships are discussed in other sections on this website so we won't get to them here. I will briefly be discussing LLCs, S-Corps, and C-corps. 

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LLCs and S-Corps are much like their "form buddies" with a few changes. LLCs are generally required to pay a yearly fee and file a franchise tax return. In return, these offer more protection to you as a business owner. However in order to fully obtain this benefit you will need to ensure you have a business bank account and it would also be recommended that you set up some method of payment whether that be a weekly salary or a percentage per job. Also you would want to cut off any personal expenses from your business card.

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S-Corps offer the benefit of only being taxed once at the individual level however offering protection and a few of the funding benefits of a C-Corp. However, in order to qualify you will need to meet a higher standard of qualifications which would be too detailed to discuss here. If you have some interest in this please fill out a Contact Us form in the tab above. 

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C-Corps is the height of business returns. It offers the most protection from a liability stand point and also offers the most room for growth. However, it does contain some disadvantages. Primarily you get taxed twice. Once at the corporate level and again at the individual level. Second you are going to be required to fill out a completely new return with various requirements and forms. This can become quite hectic and difficult to follow. However, we are here to help. If you have any more in-depth questions on this subject please fill out a contact form below or click on the Contact Us tab above.