Incorporation for Independent Route Contractors
Incorporation is a step numerous companies with independent contractors (ICs) are taking to reinforce the independent business relationship. This strengthens the business model.
Incorporation provides several benefits to you and your business, including:
- Limits your personal liability and protects personal assets
- Tax savings
What is a Corporation?
- A Legal Entity
- Separate from You
- Limits Your Liabilities
- Reduces Taxes
- Protects Your Personal Assets
- Reduces Taxes on Earned Income
What’s an S-Corporation?
- Created by Congress for SMB’s
- Most Popular Business Entity
- Limits Your Business Liabilities
- Reduces Your Taxes
How Does It Work?
- Corp Files a Separate Tax Return
- Corp Pays No Taxes (normally)
- I.R.S. Requires You Take a Salary
- Owner’s Income is Subject to Tax
- Owner Receives 2 Kinds of Income
- 1) Salary Income (W2)
- 2) Non-Salary Distribution (K1)
Different Tax Treatments for Each
- Salary Distribution (W2) is Subject to Federal Income Tax AND . . . other Taxes (e.g. FICA, FUTA, etc.)
- Non-Salary (K1) Income is Subject to Federal and State Income tax
- Net Effect . . . More Income To YOU
- Non-Salary Distributions Avoids Double-Taxation
- Non-Salary (K1) Income is Taxed at Lower Personal Income Tax Rates VS. Higher Corporate Tax Rates
- Non-Salary (K1) Income is NOT Subject to Social Security and Medicare Taxes
Understanding External Requirements
(Keeping Compliant with the Secretary of State)
- Annual Reports - Most states require corporations to file an annual report. Other states require a biennial statement. In either case, states typically require a fee to be paid when statements are filed. These fees range from $10 to $300 or more.
- Franchise Tax - Many states require domestic companies pay a franchise tax — a fee paid to the state for the privilege of operating as a corporation. States employ different formulas, which may be based on business revenue or number of authorized shares and par value, for calculating this tax.
- Due dates for annual reports and franchise taxes vary by state - Many states establish their annual report due dates to the anniversary of the corporation’s or LLC’s formation or qualification while other states have a universal due date for all corporation annual reports.
- Know the cost of these obligations - Because annual statements and franchise taxes represent ongoing requirements, you will need to educated yourself on all requirements prior to incorporating your business so that you can plan your budget accordingly.
How it Works
- Answer a short list of basic questions
- Once complete, your account rep will professionally prepare, cross-check and proof with all required information
- We will send your documents via email and ask that you review them for accuracy
- Once your documents have been returned, we will performa final review and then submit them to the appropriate filing office.
- We will monitor and coordinate with the state to ensure your filing is filed as quickly as possible
Company Name: M&A, LLC
Company Website: consultingbymanda.com
Contact Person and Phone: Marie Edwards - 678-233-2325
Email Address: firstname.lastname@example.org
- Annual Reports
- Corp Kits
- Publications / County Filings (if required)
- Dissolving your company
Incorporation and Limited Liability Company Formation Services:
- Create a legal business entity that may be required to work with your company
- Keep your legal entity in Compliance.
We can handle their accounting, payroll, and tax responsibilities so they can run their route.
Starting a New Business
M&A has the experience and resources to help your business get back into good standing quickly and efficiently. Every jurisdiction requires a wide range of documents. If you have missed any one of these filings, or reports, you may be subject to fines and fees.
Managing Your New Business
There are many ongoing tasks required to keep your business active and in good standing. We offer a full range of document preparation and filing services aimed to meet the requirements of any jurisdiction across the United States.
From Bylaws to Annual Reports M&A has you covered.