Dell Technologies
BMS-center-logo
 

Which Business Entity Is Right For My Business?

Share this Article:
Share Article on Facebook Share Article on Linked In Share Article on Twitter

By Debbie Gregory.

LinkedIN Debbie Gregory VAMBOA VAMBOA Facebook VAMBOA Twitter

 

Whether you are just starting a business or thinking of changing your business structure, a common first step is comparing the types of business structures. While a Limited Liability Company, a C Corporation and an S Corporation share some characteristics, they also have distinct differences. You should spend the time getting familiar with each type before deciding which one might be right for you.

Most small businesses are usually either a sole proprietorship or simple partnership. In both of these cases, the business taxes are part of the individual’s taxes. There are three major types of business entities that classify the business as its own “person”– a C Corporation, an S Corporation, and an LLC (Limited Liability Company).

Some business and certain tax rules are unique to the type of entity that you choose for your business. Read below for more information on each and always check with your accountant.

 

C Corporations

A C Corporation is taxed at a flat 21% regardless of how much business they conduct or money they make. Additionally, C Corporations help create personal liability protection for the owners of the business. They are designated to the public with extensions such as inc, corp, or ltd.

This type of corporation can issue stocks that when held for more than five years, they entitle the seller to tax-free gains. Raising capital is also very easy for a C Corporation as compared to the other business types because they issue stock in exchange for the funds raised.

The major downside to a C Corporation is double taxation. All business earnings are taxed and paid for by the business however, the income received by the business owners is not deductible and they must claim and pay income taxes on the salary they take from the business on their personal taxes.

C Corporations are separate taxpaying entities and file their own very specific tax forms every year to the IRS.   These C Corporations can actually choose to be taxed as an S Corporation to help offset the double taxation by utilizing income pass-through to the owners, so they report their share on their personal taxes. This way the business and the business owners pay between 10 and 37% depending on the individual.

 

S Corporations

S Corporations also help create personal liability protection for the owners of the business. They are designated to the public with extensions such as inc, corp, or ltd – the same as C Corporations. An S Corporation also has the ability to allow up to 20% total business income deductions.

S Corporations are required by law to adopt and maintain certain formalities and they have extensive rules in place for how the business can be managed. They include by-laws, operating agreements, issuing stocks, membership shares, holding director and shareholder meetings, keeping meeting minutes and other extensive records.

 

LLC (Limited Liability Company)

An LLC has many advantages for business owners. As an LLC, you can elect to be taxed at the flat C Corporation rate, which can be very beneficial if the business owner is not qualified to use certain income deductions. This type of business entity also helps you avoid the double taxation issue of the C Corporation as the LLC is taxed a lot more like a sole proprietorship. This type of business also provides you good liability protection and some pass-through taxation, just like the C and S Corporations.

Another benefit of the LLC structure to a startup is that once you have set it up, there is not any need for continual maintenance. It is also easy to add new partners or sell interest in the entity to someone else.   An LLC can have an unlimited number of members whereas S or C Corporations can only have a maximum of 100.

The downside to an LLC is that there is a minimum tax regardless of how much business you conduct. If you make zero dollars or ten thousand dollars you still owe that minimum tax.

 

The choice of business entity is a complex matter and you need to take into consideration both state and federal tax matters as well as any other issues and non-tax considerations (personal liability protection, raising capital, etc.). As with any major changes to the overall structure of your business, as well as the tax implications of any changes, we highly recommend consulting a tax, financial, and/or business professional before making any changes.

Suicide Warning Signs & Resources

Share this Article:
Share Article on Facebook Share Article on Linked In Share Article on Twitter

Stop Suicide

 

By Debbie Gregory.

LinkedIN Debbie Gregory VAMBOA VAMBOA Facebook VAMBOA Twitter

 

Suicide is a major public health concern. Suicide is among the leading causes of death in the United States.  It is also one of the greatest American tragedies for those who died, their loved ones and our nation.

VAMBOA believes this is a very important issue.  We work with and support organizations that are working to help military, veterans and their families with mental health problems.   “The Campaign To Change Direction” by Give An Hour is a valuable program.   Its goal is to remove the stigma from mental illnesses and treat it like any other illness so that those who need help will obtain it sooner than later and their mental health problems will not lead to suicide.

Give An Hour has a network of 7,000 mental health professionals that provide pro bono and confidential services to military, veterans and their loved ones.

VAMBOA founder, Debbie Gregory, serves on the Advisory Board of Give An Hour and supports other groups.   She is also one of the producers of the nationally televised annual concert in its fourth year, “America Salutes You”. America Supports You raises awareness for those who serve with focus on mental wellness.   This year’s concert will be take place late this year at the Kennedy Center in Washington, D.C.

According to the Centers for Disease Control and Prevention (CDC) WISQARS Leading Causes of Death Reports, in 2017:

  • Suicide was the tenth leading cause of death overall in the United States, claiming the lives of over 47,000 people.
  • Suicide was the second leading cause of death among individuals between the ages of 10 and 34, and the fourth leading cause of death among individuals between the ages of 35 and 54.
  • There were more than twice as many suicides (47,173) in the United States as there were homicides (19,510).

It is tragic that too many military and veterans die by suicide and even one is too many.  In 2016, the most recent data available, the suicide rate for veterans was 1.5 times greater than for Americans who never served in the military.  Close to 20 veterans a day nationwide take their own lives.   This is unacceptable and everyone’s problem.

Veterans accounted for 14% of all adult suicide deaths in the United States in 2016, even though only 8 percent of our nation’s population have served in the military.   These statistics don’t address the human factor or the devastation that suicides caused to family and friends.  We must twork to prevent suicides and dedicate more resources.

Below, we have listed the warning signs of suicide as well as some resources for help.

 

Warning Signs:

  • Talking about wanting to die
  • Looking for ways to die
  • Talking about feeling hopeless and having no purpose
  • Talking about feeling trapped or being in unbearable pain
  • Talking about being a burden to others
  • Increasing the use of alcohol or drugs
  • Acting anxious or agitated, or behaving recklessly
  • Sleeping too little or too much
  • Withdrawing or feeling isolated
  • Showing rage or talking about seeking revenge
  • Displaying mood swings
  • According to the CDC, the more signs a person shows, the greater the risk.

 

If someone close to you is exhibiting warning signs, the CDC recommends ensuring that the individual is not left alone and taking the following steps: removing any firearms, sharp objects, alcohol and drugs from the area and getting immediate help.

 

A Few Resources to Help:

  • Veteran Crisis Line at 800-273-8255 and press 1, Text 838255 or if you are deaf or hard of hearing, call 800-799-4889. This is confidential and you will reach caring and qualified responders, many of them are Veterans.
  • National Suicide Prevention Lifeline at 1-800-273-TALK (8255), available 24 hours a day, 7 days a week. The service is available to anyone. All calls are confidential. http://www.suicidepreventionlifeline.org 
  • Give An Hour: You can find a confidential and pro bono provider online by going to https://giveanhour.org/get-help/

 

Family Owned Business Challenges

Share this Article:
Share Article on Facebook Share Article on Linked In Share Article on Twitter

Family Business

 

By Debbie Gregory.

LinkedIN Debbie Gregory VAMBOA VAMBOA Facebook VAMBOA Twitter

 

A family owned business faces unique challenges that other types of businesses do not face. The overly personal nature of family relationships can cause issues with hostility, nepotism, favoritism, and other morale-killing practices but if you are diligent and set (and adhere to) the same standards for all employees, those related or not, you can create an environment that is uniquely fulfilling and diverse.   Often Veteran Owned Businesses are a family affair.

 

The top five challenges for family owned businesses and how to make sure they are not negatively impacting your family owned business:

 

1.) Company Culture

Make sure that you clearly communicate the company’s values to all employees, both those related and those who are not. If people in the company feel that they are not part of the company’s culture they will not stay with the company very long.   It makes sense to be consistent and have the same policies apply to all.

 

2.) Compensation and Benefits

All compensation and benefits need to be set according to the position in the company and not according to the relationship between the people. If the business is viewed as simply paying a relative for doing little or no work, it can cause serious morale problems among the staff who are not relatives. You have to be careful and make it very clear that everyone at the company is on an equal playing field when it comes to salary and rewards for a job well done.   This policy can also protect you from litigation.

 

3.) Generational Issues

When a company employs multiple generations, it can be a serious boon to the company overall. The younger generation brings fresh ideas, new perspectives, and new technology. However, if the originators of the business are too rigid, they may not listen to the younger employees and those people will feel frustrated or feel that they are not valued and a welcome part of the team. This can lead to low morale. Each generation has something to offer and it is best to be open-minded and actively listen to all ideas presented.

 

4.) Business and Pleasure

Special problems arise from family members working together. Personal relationships come with conflict and arguments as well as kindness and affection. When at work it is best to keep personal feelings out of business dealings; and vise versa when at home it is best to leave business at work. This is another area where it needs to be made clear to every employee, those related and not, that every single person working for the company will be held to the same standards and the same consequences apply to everyone for breaking rules or poor performance.

 

5.) Succession Planning

Most family owned business do not survive long enough to be handed off to the next generation. It is best to come up with a solid plan for when the company owners retire or die. This includes who will be the next head of the company and training them for the position well in advance.  This is extremely important with Veteran Owned Businesses especially those who obtain the majority of their revenues from government contracts that provide Veteran preferences.

 

With all the challenges, working in a family owned business can be wonderful, enriching, and wholly satisfying experience for all involved… as long as everyone is treated fairly.

The IRS Dirty Dozen

Share this Article:
Share Article on Facebook Share Article on Linked In Share Article on Twitter

IRS Dirty Dozen

By Debbie Gregory.

LinkedIN Debbie Gregory VAMBOA VAMBOA Facebook VAMBOA Twitter

What does the IRS have to say?

Every year the IRS releases a list of the most common taxpayer scams to help the general public identify and hopefully avoid falling victim to. The following is the list for 2019.

 

The IRS’ “Dirty Dozen” worst scams for 2019 (grabbed right from the IRS’ website):

  • Abusive tax shelters, trusts, and conservation easements – See IR-2019-47
  • Frivolous tax arguments – See IR-2019-45
  • Failure to report offshore funds – See IR-2019-43
  • Improper claims for business credits – See IR-2019-42
  • Scams involving disasters and charitable causes – See IR-2019-39
  • Inflating deductions and/or credits – See IR-2019-36
  • Falsifying income and/or creating bogus documents – See IR-2019-35
  • Promises of inflated tax refunds – See IR-2019-33
  • Tax return preparer fraud – See IR-2019-32
  • Identity theft – See IR-2019-30
  • Phone scams – See IR-2019-28
  • Pervasive phishing schemes –  See IR-2019-26

 

The IRS also has a quick intro video about the Dirty Dozen list:

 

For more information or to read the full text on any of the Dirty Dozen listed above, check out the official IRS website:

https://www.irs.gov/

 

VAMBOA, the Veterans and Military Business Owners Association encourages its members and supporters to be on the alert and protect all of your information.

Avoiding Business Tax-Related Identity Theft

Share this Article:
Share Article on Facebook Share Article on Linked In Share Article on Twitter

 

By Debbie Gregory.

LinkedIN Debbie Gregory VAMBOA VAMBOA Facebook VAMBOA Twitter

 

Identity thieves are constantly looking for and creating new scams to utilize other people’s information to their financial advantage. Tax-related identity theft broadens the criminal’s choices for fraud. Utilizing a business’s tax identification number instead of an individual’s social security number allows the criminal to file fraudulent business taxes, claim fraudulent tax credits, or obtain any number of business-related tax benefits.

 

How can you tell if your business is being used in a fraudulent way?

It is essential to understand that just like personal identity theft, when anyone’s identity can be stolen at almost any time, a business is just as vulnerable. Here are a few ways to tell if your business’s identity has been stolen:

  • You try to file your business taxes and they are rejected by the IRS for “duplicate filings” yet you had not previously filed
  • Your extension request has been rejected for a similar reason
  • You receive an unexpected tax document with incorrect information

 

How can you safeguard your information?

There are many ways you can safeguard your information including these tips:

  • Always use reputable tax professionals if you hire someone to do your taxes for you. Make sure that your professional is also diligently keeping your information safe.
  • Look for a CPA who has training or certification in cyber security.
  • Never share your passwords, security number, credit card numbers, or any other sensitive information with anyone that does not absolutely need to have this information.
  • Be very wary of any email asking you for personal information.
  • Never click on a link in an email that seems even slightly suspicious. Remember that the IRS is not going to email you that they will conduct an audit or something of that nature.
  • Keep a close eye on your credit score.
  • Never write your entire account number when paying for something with a check.
  • Always shred documents that you do not need, don’t just toss them out. Criminals routinely go through trash bins looking for sensitive documents.

 

A Huge Red Flag:

Most emails sent by scammers contain quite a lot of misspelled words and terrible English grammar. A professional company or government agency is much more careful when communicating with their clients.

 

Worried something is amiss?

Immediately file a fraud alert on yours or your business’s credit report by calling Equifax (888-766-0008), TransUnion (800-680-7289) or Experian (888-397-3742). After you have filed your reports, make sure that you directly call the issuers of any credit cards that you feel may have been impacted.

ibmpos_blurgb