If I’m speaking honestly, most small businesses shouldn’t consider incorporation. The additional accounting requirements on a side business or hobby profession are far too great to consider taking on for an operation without much revenue or if you intend to keep your day job.
However, once a small business begins to generate significant profits (or if you are in the planning phase, and have a decent source of expected revenues if not already in business), you may want to make a Subchapter S election with the Internal Revenue Service.
An s-corporation may allow the small business owner to avoid approximately 15% of self-employment taxes on a portion of the firm’s profits.
Our Iowa S Corporation kit
The first step in becoming an s-corp is to set up an eligible entity, like an LLC or corporation, which our kit walks you through in great detail, even providing examples of the forms. It also gives details on how to get an EIN and samples of entity management documents — like an operating agreement for the limited liability company and corporate bylaws with the corporation kit.
We recommend most clients use the LLC base version available below for an Iowa S corporation:
If you would prefer to use a tradition corporation as the base entity, click this button:
Note: we recommend the LLC because there are fewer requirements and generally less red tape.
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If you buy one of our Iowa kits and realize it doesn’t work for you or your reading/learning style, just e-mail us for a refund. The e-mail address is firstname.lastname@example.org.
Your CPA vs. TurboTax: When it comes to your tax return, should you do it yourself or rely on someone else?
DPAD: A Big Deduction for Some Small Businesses: If you produce, grow, or manufacture something, you may be in line for a deduction.
What Are the Advantages of an S Corporation?: More details on how an s-corp can save on taxes.