The requirements for having a separate tax ID do separate the individual status from the business status, so it is safe to say that if the business isn't under a separate tax ID, then it won't help tax-wise to pay profits to the owners.
No, having a separate tax ID doesn't mean you automatically will benefit tax-wise from paying profits to the owners. Partnerships and corporations follow some different rules - yes it's important to clarify that, and I didn't mean to mislead by not going into all that detail. I just wanted to keep it simple as to when to start asking questions.
The bottom line is, of course, discuss year-end options with the accountant - before the year is over. Even if the business is a proprietorship or partnership, there might still be some good last-minute business moves to make to help reduce tax liability.
Deb
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Thread: any accountants out there?
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12-08-2007, 05:48 AM #7
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Last edited by Deborajen; 12-08-2007 at 05:53 AM.
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