Your Trusted Accountants
Welcome to Futerman & Associates Inc, where we specialize in professional accounting and tax preparation services. Let us handle your financial needs with expertise and precision.
Thinking of Incorporating?
Reasons for;
Incorporating a business can provide many benefits, including liability protection, tax advantages, and credibility.
Liability protection
-
Limited liability: Legally protects your personal assets from business debts, losses, or lawsuits
-
Personal asset protection: Separates your personal assets from your business assets
Tax advantages
-
Lower corporate tax rates: May be available through incorporation
-
Tax planning: May offer more flexibility in tax planning
Credibility
-
Professional appearance
Using "Inc." or "LLC" in your business name can make it seem more legitimate and trustworthy
-
Easier to raise capital
Being incorporated can make it easier to apply for loans and attract investors
Misc benefits
-
Perpetual existence: The corporation can exist separately from its owners or shareholders
-
Employee benefits: May be able to offer health insurance and retirement plans
-
Incorporating can be a good option if your business is taking on more risk and you want additional protection.
Should an owner be on company payroll?
The answer is, yes
If your business is an S-corp, you must pay yourself a salary if you are actively involved in running and managing your business. To keep you from avoiding employment taxes, the IRS requires S-corp owners to pay themselves a “reasonable salary” that is in line with the job duties, education, skills, and experience.
Difference between Draw & Payroll
Pros & Cons
An owner's draw is a withdrawal of funds from a business by the owner for personal use, while a salary is a fixed amount paid to the owner for their work as an employee within the business. Both methods are used to pay business owners, but they have different implications for taxes and business structure.
Key Differences:
-
Business Equity:
Owner's draw reduces business equity, while a salary does not directly impact equity.
-
Taxation:
An owner's draw is generally taxed as ordinary income, while a salary is subject to payroll taxes.
-
Business Structure:
Sole proprietorships, partnerships, and LLCs often use owner's draws, while C corporations and S corporations typically use salaries.
Tax advantages:
-
Tax planning: Payroll offers more flexibility in tax planning. A greater amount of tax liability can be paid over a year rather than via estimated payments or with the annual tax returns.
-
Net Income: Draw is Not an expense to the company, so does not reduce the company net income. Payroll is an expense and does reduce the company's net income.
Retirement:
-
Retirement accounts & social security, thinking about your own future
Paying yourself a salary opens up your opportunity to open retirement accounts, such as Traditional & Roth IRAs & 401k's that are only available to those with earned income. Business income alone does not quality. A portion of your FICA tax is paid into your social security for when you are of eligible age to collect. Without payroll, you are not contributing anything into your own future other than what you can save.
Services
250 US dollars
150 US dollars
750 US dollars
About Our Firm
Futerman & Associates Inc is a reputable accounting firm dedicated to providing top-tier financial services to individuals and businesses. With a focus on accuracy and efficiency, we offer comprehensive accounting, tax preparation, and financial consulting services to meet all your needs.
We handle everything from new business establishment, bookkeeping, payroll and sale tax filing, to tax return preparation and filing, let us handle your accounting so you do not have to stress.
Our team of experienced professionals is committed to delivering personalized solutions tailored to your specific requirements. We strive to build long-lasting relationships with our clients based on trust, integrity, and proactive financial guidance. Contact us today to experience the difference.
