When starting a business, the founder has many choices for the business's form of entity, and therefore, a number of different factors must be taken into consideration by the taxpayer, including the number of employees who will be involved, the amount and source of the capital that will be used to start and operate the business and whether the nature of the business may expose the taxpayer to potential lawsuits and other financial liabilities. This course covers the main considerations relevant to starting a business and focuses on the tax requirements and features of each.

• identify in general terms the nature of the tax liabilities that apply to the six most commonly used types of business entities under the United States tax code
• identify the advantages and disadvantages of selecting each of the six available entities for the structure of a business operation
• identify the time period that must generally elapse before a business that has elected to change its classification can make a new election, and recognize circumstances in which this time period requirement may be waived
• identify the method and form used to elect S corporation status, including the date that the election becomes effective under different circumstances
• identify the four main characteristics required by an organization that wishes to obtain and maintain tax-exempt status

Tax Year: 2023

CPAs, EAs, and other finance, accounting, and tax professionals