Take the FREE Wealth Potential Questionnaire to CHANGE your life


Hey, fellow millennial tax enthusiasts! Let’s break down the IRS info into bite-sized, relatable chunks for us to grasp, emoji-style! ๐Ÿ“Š๐Ÿ’ผ๐Ÿ’ธ

In 2021, around 43 million tax returns were filed by businesses. That’s like a zillion forms! ๐Ÿ˜ฑ Here’s the breakdown:

  • Partnership returns: 4.7 million ๐Ÿค
  • S corporation returns: 5.4 million ๐Ÿข
  • C corporation returns: 2.1 million ๐Ÿ›๏ธ
  • Non-farm sole proprietorships: 27 million ๐Ÿ‘ฉโ€๐ŸŒพ๐Ÿ‘จโ€๐ŸŒพ
  • Farm sole proprietorships: 2 million ๐Ÿšœ
  • Tax-exempt organizations: 1.7 million ๐ŸŒŸ

Now, let’s talk about sole proprietors. It’s like running a business all on your own! You get to keep all the profits, but you’re also responsible for any debts or losses. It’s your show! ๐ŸŽฌ๐Ÿ’ฐ

If you want your business to have a cool name, you might need to file a “doing business as” (DBA) name. Think of it as your secret business identity! ๐Ÿ•ต๏ธโ€โ™‚๏ธ๐Ÿ•ถ๏ธ

And guess what? You and your business are like a package deal. So, you don’t pay separate taxes. Your business income is your income. Easy peasy! ๐Ÿค๐Ÿ“๐Ÿ’ธ

Partnerships are like dynamic duos! You and your partner(s) team up, sharing the business adventure together. Everyone chips in with money, skills, or stuff! ๐Ÿค๐Ÿง—โ€โ™€๏ธ๐Ÿ’ฐ

Just like a squad, partnerships need some ground rules. So, you create a partnership agreement that covers decision-making, profits, and how to solve problems. Teamwork makes the dream work! ๐Ÿค๐Ÿ“„โœจ

Now, here’s the magic part: the business itself doesn’t pay taxes. The profits or losses pass through to you and your partner(s). You handle it on your personal tax return. Simple! ๐Ÿ’ผ๐Ÿ”๐Ÿ’ธ

But hey, there are a few downsides too. You and your partners share not only profits but also debts and decisions. So, keep the communication flowing! ๐Ÿ’”๐Ÿ—ฃ๏ธ๐Ÿ’ผ

Next up, corporations! ๐Ÿข๐Ÿ’ผ These are like formal kingdoms for businesses. They have a special title at the end of their name (Corporation, Incorporated, Limited). They’re official! ๐Ÿ‘‘๐Ÿ“œ

Corporations pay taxes on their profits. It’s like their royal duty! ๐Ÿฐ๐Ÿ’ธ

Now, let’s meet the cool S corporations (Scorp)! They’re like superheroes! ๐Ÿฆธโ€โ™‚๏ธ๐Ÿ’ผ They don’t pay taxes themselves, only the shareholders do. Sneaky, right? ๐Ÿ•ต๏ธโ€โ™€๏ธ๐Ÿ’ฐ

But watch out! You gotta file Form 2553 to become an S corporation and save on taxes. It’s like joining a secret club! Shh… ๐Ÿคซ๐Ÿ“

LLCs (Limited Liability Companies) are a mix of a partnership and a corporation, the best of both worlds! ๐ŸŒ๐Ÿค๐Ÿ’ผ You get protection and flexibility!

If you want to become an LLC, just fill out Form 8832. It’s like picking your business outfit! You decide how you wanna be treated for taxes. ๐Ÿง™โ€โ™€๏ธ๐Ÿ“‹

Now, let’s talk about tax-exempt organizations. They’re like charitable wizards! ๐ŸŒˆโœจ They don’t pay federal income tax ’cause they’re doing good deeds for the community!

But there are some rules to follow, like not being for-profit and not messing with politics! ๐Ÿšซ๐Ÿ’ฐ๐Ÿ—ณ๏ธ

So there you have it, tax wizards! Whether you’re a sole proprietor, a partnership duo, a corporate ruler, or a tax-exempt do-gooder, remember you’ve got the magic to handle it all! ๐Ÿง™โ€โ™‚๏ธ๐ŸŒŸ๐Ÿ’ช

Comments +

Leave a Reply

Your email address will not be published. Required fields are marked *

Take the FREE Wealth Potential  Questionnaire to CHANGE your life

Answer a few questions to check your wealth potential.