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Incorporate Newsletter Dated: |
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Incorporate Tip #4: When Is the Best Time to Incorporate?
Ina Holt-Quentin, Editor
When is the best time to incorporate?
From a legal standpoint, any time is the
best time. The sooner you incorporate, the
sooner you make the move from the world of
unlimited liability to the world of limited
liability.
From a tax savings standpoint, any time
great. The sooner you incorporate, the
sooner you will start putting more money in
your own pocket and less in Uncle Sam's.
But from a tax reporting and paperwork
standpoint, there is one time of year that
stands out... January 1st.
Why January 1st?
Assuming you have a sole proprietorship (or
other entity, such as a partnership) on
January 1st, and then you decide to
incorporate on any date other than January
1st, you face filing, not one, but two
business income tax returns for that year,
one for your sole proprietorship and one for
your corporation.
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