Tax preparation software isn’t only for indivduals, it’s also used by both large and small businesses.

LLC Companies

LLC which stands for Limited Liability Company seems to be the way to set up a business now days.  An LLC is not a corporation, or a partnership, but has some aspects to both.  This type of company is less formal and have more flexibility than corporation’s and partnership companies because it is owned by LLC members of the company and there are no limit that I know of, how many  members that can be .

Members of limited liability companies can not be held liable for the company debts, assets. and it can’t be seized.  Limited liability companies gives you an advantage similar to the partnership tax because each member is requested to pay their own social security and pay medical tax on profits and their profits are past through directly to the owners, who are the members and individually  pay their taxes on their earnings just one time.  Since limited liability companies are made up with members, the company has to have member approval to transfer anything.

C Corporations

C  Corporations Businesses are taxed under sub chapter C of the Internal Revenue code and is default corporation formed by incorporating.  C Corporations have some advantages since it separates legal and tax entity from its shareholders since it gives stock to the share holder and the shareholder is not liable for the tax on the business or debts the company may have. The only thing that the share holder is liable for is dividends  given on the stock that was given to each shareholder by C corporation and must pay taxes on this dividends received .C Corporation businessis responsible for the tax within the business.

C Corporations have some disadvantages since it is more costly and has to make an effort to maintain legal requirements plus agent services.

Here are a few examples that the C Corporation business can deduct  such as expenses for their employees, health insurance, and if you receive a salary instead of dividends.

All taxes are paid within this type of business by itself.