Vital to any business, bookkeeping is the recording of a company’s financial transactions. Timely and accurate bookkeeping provides business owners with reliable performance measures in order to make strategic decisions concerning revenue and income goals, operations, and financial decisions.
Clearly, this is important – the quality of bookkeeping can make or break a business when it comes to understanding its daily functions. Bookkeeping is also an important function in funding a business, managing cash flow, staying tax compliant, and organizing operations.
“Making good judgments when one has complete data, facts, and knowledge is not leadership – it’s bookkeeping,” Dee Hock, founder of Visa, once said.
Palazzo & Company understands this, and since 2001 it has become a global service in providing business services to clients nationwide and in
over 20 countries.
Besides specializing in bookkeeping, the company also provides a range of services to include bank reconciliation, credit card reconciliation, payroll, payroll taxes, filing payroll tax forms, sales tax, adjustments (inventory, depreciation), contract labor payroll annual forms, and unlimited client support (24/7 support).
Some business entities require separate tax returns; others do not. What follows are the different types of entities and the returns they require.
Sole Proprietorship
This is a business that is not a corporation and has one owner. A single member LLC also falls into this category. Some married couples who jointly operate a business may be able to file this way. This type of entity generally does not require the filing of a separate return, and the activity is part of the owner’s personal return.
Partnership
When two or more taxpayers begin a business, and a corporation is not set up, it is usually considered a partnership. This type of entity is required to file a separate tax return. Once the partnership begins conducting business, it must file a return every year. A tax form, called a K-1, is generated from the return; and this K-1 is then used for each individual’s personal tax return. This is known as a flow-through entity.
S-Corporation
A common entity, many taxpayers find it easier on the small business owner than a standard corporation. As a S-Corporation, a separate tax return must be filed each year once it is set up with the Internal Revenue Service. A K-1 is generated from the return, and this is then used for each individual’s personal tax return. This too is a flow-through entity.
Corporation
This is specifically known as a C-Corporation.
A separate tax return must be filed annually once the corporation has been set up. The income is taxed through the corporation and not through the owner’s personal return. When the owner withdraws money from the corporation, these are dividends, which are then taxed on personal returns.
Non-Profit
There are many kinds of non-profits; many require a separate tax return to be filed annually; others simply require a yearly form.
Whether overseas or just across the street, Palazzo & Company have the experience and expertise to help.