COVID Funding Tips for Small Businesses
COVID may have greatly impacted your business in 2020.
We are all hoping that 2021 is a much better year for everyone.
January is right around the corner – a time when many traditionally revisit their goals and priorities for the year ahead.
One of NCP’s most important new year goals is to help you be more proactive in launching that profitable new business initiative or creating better protection for your assets.
We’ve found a solution that will help you feel more confident going into 2021 by establishing a complete foundation for your business and personal assets like real estate or investments. The best part is that takes less than 30 minutes of your time!
If you’re looking to form an LLC (most popular) or corporation (no matter what state) , December is the best time to get this done.
Waiting until January can be the most risky and costly approach – here’s why;
• If you wait until 2021, by the time the entity is filed and everything is in place, more than likely you will be operating as a schedule C for two to three weeks of the beginning of the year (assuming you are operating a new business, real estate is different).
• You are risking an audit! There is a $300 Billion tax gap and the #1 culprit is sole proprietors that file a schedule C (that’s why we want to help you avoid that track in 2021, or at least be on it for the shortest possible time).
• We realize that most incorporating services say they incorporate in 24 hours (which may be true but there are additional steps required to establish you business with EIN, banking and more by the first of the year and they all take time. Some states are very backed up with filing and it may take from 5-12 business days up to several weeks for them to process everything.
• Keep in mind at this time of the year; secretaries of state around the U.S. are becoming more and more overloaded with filings (mostly due to budget cuts). This means that even if filing expedited, it can take much longer to form your entity and get a bank account open in time for any end of the year transactions.
Here is some GOOD NEWS!!
We can help but we need you to take the first step to get started. Learn more here.
Even if you’re not 100% certain whether a new entity is best for you or just have a few questions about the process, we can help you make the decision that’s best for your individual needs. If a new entity will not improve your business situation, we’ll let you know with no risk or obligation on your part.
Perhaps this Strategy will be a Big Advantage for You…
Take advantage of immediate tax savings! Sec. 195 of the IRC states that capitalization of start-up expenses (up to $5,000) may now be immediately written off against personal income (S corp and LLC taxed as a flow through).
This ONLY comes into play if you start your business in December.
In most cases, the best option is to incorporate in December but record a January start date on the SS4 for the EIN to avoid a short year return (does not apply to C corps).
As a reminder NCP forms corporation and LLCs in all 50 states, and our goal is to help you launch your business with confidence. We will also help you build business credit and Keep the IRS off your back! Most importantly we have the tools and systems to help your business get off to a fast start to profits.
Also, if you have any partners or referrals that may plan on starting a new company at that time, please have us call them now (we now pay a 10% referral fees).
CAUTION: Avoid forming a $99 corporation or LLC, most of the times they will provide ZERO protection if challenged because it is not a COMPLETE FORMATION.