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Which tax entity structure is right for my business?

A common question I answer involves which type of tax entity structure is right for a client's business.  It's not exactly a one plus one equals two solution.  There are a number of factors to weigh and cash flow is a big one.

Which tax entity structure is right for your business?  It depends on the stability of your cash flow (can you pay yourself), how long do you want to remain in business, will you have any partners, what are the chances for being sued to name but a few.

A sole proprietorship is the simplest to enter and the simplest to exit out of.  Is it right for everyone?  No.  Two or more people may enter into a partnership.  Both the sole proprietorship and the partnership have different tax treatment than corporations.  Is that bad?  It depends.

So, which one is right for you?  It's the one which gives you piece of mind.  We can certainly help answer that question and more when you're ready.

I am a CPA in San Antonio and provide bookkeeping, payroll, taxes and more.  We offer a free initial visit and look forward to serving your business needs.

Richard J. Garcia | 07/03/2012