Is this for me?
Yes, if you're about to start a business, if you're forming an LLC or corporation, if you're going into business with a partner, or if you want to know whether an S election makes sense once the business is earning. Call before you file anything with the state. A short conversation now can save a messy fix later.
What happens
- We talk about the business. What you sell, who buys it, how much you expect to earn, and who owns it.
- I compare the entity options against your actual numbers, not a generic example.
- You choose, and I set up the tax side: the EIN, the S election if it makes sense, and the books.
- We go through the first-month checklist below, so the sales tax permit, payroll registration and bank account are in place before you need them.
What to bring
A short paragraph on the business. A rough first-year budget. The names and planned ownership split of any partners. Startup costs you've already paid, with receipts. And any lease, loan or franchise agreement you're considering, before you sign it.
The choices, side by side
A quick, plain-English comparison. The right answer depends on your profit, your partners, your plans for the business and how much paperwork you're willing to live with.
| Entity | How it's taxed | Worth knowing |
|---|---|---|
| Sole proprietorship | On your personal return (Schedule C). Self-employment tax on all profit. | Simplest, but no liability protection. |
| Single-member LLC | Same as a sole proprietorship, unless you elect otherwise. | Liability protection. The most common starting point. |
| Partnership or multi-member LLC | Partnership return (Form 1065). Profit flows to the owners on K-1s. | Flexible, but you need a written agreement between the owners. |
| S corporation (an election) | Form 1120-S. Owners who work in the business take a reasonable salary through payroll. Profit above that skips self-employment tax. | Can save real money once profit is high enough. Requires payroll and stricter books. |
| C corporation | Form 1120. Flat 21% federal tax at the company level, then tax again on dividends. | Makes sense for some growth companies and for qualified small business stock. Rarely right for a small service business. |
Your first-month checklist
- Choose the entity and, if it's an LLC or corporation, file it with the Texas Secretary of State.
- Get an EIN from irs.gov. It's free.
- Open a separate business bank account and run every business dollar through it.
- Set up the books in QuickBooks Online with a chart of accounts that matches your tax return.
- Get a Texas sales tax permit if you'll sell taxable goods or services.
- Register for payroll with the IRS and the Texas Workforce Commission before you hire.
- Plan for estimated taxes. Nobody withholds for you anymore. Set money aside from day one.
- Decide on the S election timing, if it's going to make sense.
What I help with
- Entity comparison with your actual numbers
- S corporation election and reasonable salary
- QuickBooks setup and bookkeeping
- Startup cost and home office deductions
- Cash flow budget for the first year or two
- Loan applications and projections for the bank
Common questions
Should my LLC be taxed as an S corporation?
Sometimes. The S election can save self-employment tax once profit is high enough to pay yourself a reasonable salary and still have a meaningful amount left over. Below that, the extra payroll filings and return costs usually eat the savings. I'll run the numbers for your business before you elect.
When do I have to file the S election?
Form 2553 is due within two months and 15 days of the start of the tax year you want it to apply to. For a calendar-year business, that's March 15. Missed it? There's a relief procedure for late elections in many cases, so ask before you assume it's too late.
Where do I get an EIN?
Directly from the IRS at irs.gov. It's free and takes a few minutes. Be careful with websites that look official and charge you for it.
Do I need an attorney too?
For a simple single-member LLC, often not. For a partnership, a business with outside investors, or anything where the owners need an agreement about who gets what, yes. I'll handle the tax side and work alongside your attorney on the rest.
Texas has no income tax. Do I still file anything with the state?
Yes. LLCs, corporations and most partnerships file a Texas franchise tax report every year, due May 15, even when no tax is owed. If you sell taxable goods or services, you'll also need a sales tax permit from the Comptroller. If you hire employees, you'll register with the Texas Workforce Commission.