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Save Taxes with Virginia S Corp Kit

With the addition of healthcare taxes from the Patient Protection and Affordable Care Act (frequently called Obamacare) and the expiration of the Bush tax cuts, Virginia business owners face a significant raise in taxes starting in 2013. Fortunately, there is a way to keep your business's taxes low. S corporations can save a business thousands of dollars a year in income and payroll taxes, and they are actually pretty easy to set up yourself. All you need to do is follow three simple steps.

1. Form an Eligible Entity

To begin you will form an eligible entity, which will be the base for your s corporation. Usually this is either a limited liability company or a corporation. Form an LLC by filling out an Articles of Organization form and then sending it and the $100 filing fee to the State Corporations Commission in Richmond.

You follow a very similar process to form a corporation: You fill out an Articles of Incorporation form and send it to the State Corporations Commission.

2. Apply for an EIN

Once you establish your corporation or LLC, you can apply for an Employer Identification Number. Employer Identification Numbers, or EINs, function like Social Security Numbers for businesses. To apply for yours, fill out an SS-4 form and submit it to the Internal Revenue Service. You can find this form on the IRS website.

3. Make the S Corporation Election

Finally, you will need to make the S corporation election. To make the election, fill out a 2553 form, which is available from the IRS website as well. This form tells the IRS that you want your business to be treated using laws from Subchapter S of the Internal Revenue Code. Once the IRS receives your election, they will evaluate your 2553 form to check that you are eligible to make the election, and that you followed correct procedure in making the election.

If you feel confident in completing this process on your own, don't hesitate to get started. If you would like a bit more instruction and explanation, my do-it-yourself S corporation kits are just what you need. I created two versions of my S corporation kit. One kit is designed for business owners who want to form their S corporation using an LLC, and the other for business owners who want to use a corporation.

Virginia Kit Version 1: LLC

I strongly recommend using an LLC as the base for your S corporation. In most cases, they benefit the business more than using a corporation would. My do-it-yourself kit provides all the necessary information to create an S corporation on your own. I start by explaining the benefits and drawbacks of forming an LLC in Virginia, then I detail the steps of how to form an LLC, apply for an EIN and make the S corporation election. I also include filled-out examples of all the forms you will use for reference.

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Virginia Kit Version 2: Corporation

There are some instances where a corporation will benefit a business more than an LLC, and I provide a kit for businesses in that situation as well. In the corporation version of my S corporation kit, I explain the positives and negatives of incorporating in Virginia and how to balance them. I give clear, detailed steps to guide you through forming a corporation, applying for an EIN and making the S corporation election. As a bonus, I also include a set of sample corporate bylaws, which may be used by you or your attorney as a guide when creating your own bylaws.

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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.

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