I want to start a new business, what are my next steps:

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Step # 1: Make a plan:

• Define your mission

• Description of business objectives

• Define target market

• Determine who the  competition is

• Describe product or services

• Develop marketing & sales strategy

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Step #2: Start the new business:

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It is important to select the proper structure from the start! There are a few types of entities to choose from:

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DBA or Sole Proprietorship:

• Simplest Form

• No separation from you as an individual

• Sole Proprietorship

• Fictitious Name

• $50 fee (for 5 years)

• Not exclusive in state of FL

• Income & Expenses reported on your personal return - Schedule C

• Net income is subject to 15.3% SE tax + Federal Tax

• Audit Risk

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Inc, Corp or PA:

• Separate Entity

• $150 fee to register with state of FL

• $150 annual report filing fee

• Exclusive use of company name in state of FL

• Default tax filing as C-Corp-subject to 21 % flat tax + tax on dividends paid to owner

• File election with IRS to be treated as an S-corporation (passthrough entity). Taxation explained on next page)

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LLC or PLLC:

• Limits liability in the state of FL

• Creditor protection -limits liability to business assets only, not personal assets

• PLLC designation used for professionals

• $125 fee to register with the state of FL

• Single Member LLC is disregarded for tax purposes - taxed same as sole proprietorship (15..3% SE tax + Federal Tax)

• Multi-Member LLC - taxed as partnership by default. Net income of partnership is subject to 15.3% SE tax + Federal Tax

• Single Member LLC and Multi-Member LLC's can file election with the IRS to be treated as an S-corporation (pass through entity)

• S-corporation files Form 1120-S: US S Corporation tax return

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Example of Taxation:

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Sole Proprietorship, DBA, Single Member LLC

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Income: $30,000

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Expenses: ($10,000)

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Net Income $20,000

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SE Tax: $3,060

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*Federal Tax based on marginal tax bracket

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S-Corporation

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LLC, PLLC, Inc, Corp or PA

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Income: $30,000

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Expenses: ($10,000)

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Net Income $20,000

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Officer Salary: $10,000

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SS & Medicare Tax: $1,530

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*Federal Tax based on marginal tax bracket

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Step #3: Pick a Business Name and make sure it’s not taken.

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First step is to select a name for your business. Once you have a name selected, we can file the Articles of Organization with the FL Division of Corporations. It can take up to 2 weeks for them to approve the new company.

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Step #4: Obtain an EIN with the IRS

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Step #5: Open a business bank account