Do-it-yourself Hawaii S Corporation Kit
If you operate an active trade or business in Hawaii, I've got a couple of bits of good news for you. First, you may be able to restructure your business so it's taxed as an S corporation for both federal and state purposes--and then find yourself saving thousands of dollars a year in taxes as a result.
And here's the second bit of good news. Turning your business into an S corporation doesn't need to be expensive or complicated. You can do the work yourself in an hour or two--as long as you're careful...How can that be, you ask? Well, you can simply download one of the affordable PDF kits with step-by-step instructions to complete this process yourself.
Before you get the question of whether or not you want to grab a kit, though, let me identify the specific steps you'll need to take in order to form an Hawaiian S Corporation... there are three.
Step One: Form an Eligible Entity
You need something, an entity, which you can turn into an S corporation. So that's the first step you need to take.
In most cases, your eligible entity will be either a limited liability company or a regular corporation. To form an LLC, fill out an Articles of Organization form. Or, to form a traditional corporation, fill out an Articles of Incorporation form. Submit either form, along with $50 for the processing fee, to the Department of Commerce and Consumer Affairs in Honolulu.
Step Two: Get an Employer Identification Number
Once you establish your eligible entity, you need to get your Employer Identification Number, or EIN. Fill out an SS-4 form, found on the Internal Revenue Service website, and submit it to the IRS. You should receive your EIN within the month.
Step Three: Make the S Corporation Election
Once you receive your EIN from the IRS, you can make the election to be treated as an S corporation. This means you will ask Internal Revenue Service to treat your business using the tax laws in Subchapter S of the Internal Revenue Code, hence the name "S corporation." To make the election, fill out a 2553 form and submit it to the Internal Revenue Service center in Ogden, Utah.
Need more help? No problem. Purchase and then download one of my do-it-yourself S corporation kits. I created two versions of my S corporation kit: one for businesses using an LLC and another for businesses using a traditional corporation.
Hawaii S Corporation Kit Version 1 Uses an LLC
Because corporations tend to be trickier to manage than LLCs--lots more red tape and administrative monkey-business--I recommend people use an LLC as the base for their S corporation.
If you want to use an LLC for your business, then, consider the LLC version of my Hawaii kit. The LLC version of the kit gives clear, detailed steps that walk you through forming your own S corporation. I provide completed examples of every federal and state of Hawaii form you will fill out for reference, and to further help you start your new business, I included two sets of sample LLC operating agreements: one for single member LLCs and one for multiple member LLCs.Purchase and Download
Hawaii S Corporation Kit Version 2 Uses a Traditional Corporation
I can't think of many cases where a regular corporation is the better base for an S corporation. But in a handful of usual situations, a business may need to use a regular corporation. (One example of this? When your business wants to use the words "corporation" or "incorporated" in its name or one of the related acronyms like "corp" or "inc.")
If you need or want to use a regular corporation, you may be interested in the corporation version of my do-it-yourself kit. In it, I analyze how to balance the pros and cons of incorporating a business in Hawaii, and I provide detailed steps for incorporating, for obtaining an Employer Identification Number and for making the S corporation election. I also include a set of sample corporate bylaws, which you or your lawyer can recycle as your own bylaws.Purchase and Download
Additional Information You May Find Useful
If you want additional information about how to maximize the tax savings related to running a business or investment venture, you may also be interested in one of our downloadable e-books (see descriptions below). Each book covers a category of tax planning topics that easily save a business owner significant amounts of income or self-employment taxes (potentially thousands of dollars a year) and is instantly downloadable.
One of the most powerful tactics for saving small business taxes is maximizing your deductions. You can literally save thousands in taxes each year.Read More
Using an S corporation for your business? To maximize savings, you need to minimize the salary paid to shareholders. But this decision is tricky.Read More
Tax laws provide active real estate investors with giant tax planning loopholes. A little upfront planning on your part could save you thousands a year...Read More