The changing landscape of the US tax code continues to create tailwinds for the business owner. Today, when it comes to earned income, the amount you make may matter less as compared to how you make it giving rise to more small businesses. With the massive surge toward small business ownership will be an increased need for qualified small business knowledge.
There are a number of common mistakes many founders make that can destroy everything they worked so hard to achieve. Most occur when there is some business success. Some mistakes are made out of ignorance during the initial filing process with the Secretary of State and others are the result of failing to finish the process.
When you are just an investor in an S-Corp, ostensibly you do not work for the business and you do not participate in its management as an officer. You are therefore considered limited in your liability and your income from the business based on your ownership share of the business is usually considered passive income.
How you pay yourself as an owner depends on the type of entity you are and how many owners there are. This post lays the groundwork and defines a few terms that should help demystify how entities pay the owners of the business.
Robert Kiyosaki, the author of Rich Dad Poor Dad, uses a model he calls the Cash Flow Quadrant to explain different ways income is generated. Being a business owner is different from being self-employed in that as a business owner you hire employees to do the work. That is not to say that the business […]
Many new business owners make several formation errors during and after the registration process that can come back and bite them later. 1, One common formation error is that the registering agent fails to include an entity identifier in the name, such as LLC or Inc. 2, Once registered, many LLCs fail to produce an operating […]