Do-it-yourself Iowa S Corporation Kit
Do you know that turning your Iowa business into an S corporation can save you thousands of dollars a year in payroll and income taxes? Do you also know that you can form an S corporation yourself? It's true. You don't need to pay an attorney, accountant or online incorporation service to do the work for you. The entire process actually only requires you to prepare three relatively straightforward forms, as discussed below.
Note: If you read through the overview provided in the following paragraphs and still think the process of setting up an S corporation in Iowa sounds tricky, take a peek at the ordering instructions and information that follows the "S corporation set up" discussion. You can purchase and download one of the my do-it-yourself kits to get a step-by-step PDF guide as well as example forms and sample governing documents.
1. Form an Eligible Entity
You need an eligible entity to be the base of your S corporation. Usually an eligible entity is a limited liability company or a corporation. To form an LLC, complete a Certificate of Organization. For a corporation, complete an Articles of Incorporation form. Submit either form, along with the $50 fee, to the Iowa Secretary of State Office.
Note: Iowa doesn't supply businesses with a blank Certificate of Organization or a blank Articles of Incorporation form to fill out. A business creates its own Certificate of Organization or Articles of Incorporation, and must include all the necessary information. A list of all the required information can be found on the Iowa Secretary of State Website, and in chapters 490 and 490A of the Iowa Code.
2. Get an EIN for your Business
Once you establish your eligible entity you can apply for an Employer Identification Number (or EIN) with the IRS. An EIN is a bit like a Social Security Number for a business. To apply, fill out an SS-4 form and submit it to the Internal Revenue Service. The IRS provides downloadable SS-4 forms on its website. You should receive your EIN within a few weeks.
3. Make the S Corporation Election
After you receive your EIN, you can make the election to be treated using the tax laws in Subchapter S of the Tax Code. (This is actually what "becoming an S corporation means," you don't actually turn into an S corporation. Rather, you elect to be treated using a specific set of rules in order to maximize tax savings.) To make the election, fill out a 2553 form and submit it to the IRS. The IRS checks that you are eligible to make this election and that you followed the correct procedure before you receive s corporation status.
If you feel confident completing this process on your own, by all means get started. You could start saving thousands in taxes each year! If you would like a bit of friendly coaching throughout the process, or if you get stuck in the middle and need some help, my downloadable e-books are here to help.
I created two versions of my do-it-yourself Iowa S corporation e-book kit. One version helps businesses using LLCs and the other helps businesses using traditional corporations to make the S corporation election. Both kits are available for free using the promotion code listed above.
Iowa Kit Version 1: Using an LLC
Most businesses benefit most from using an LLC as the base for their S corporation. LLCs tend to be easier to manage. The LLC kit includes detailed instructions to guide you through each step. It also explains the benefits and drawbacks of forming an LLC in Iowa. For reference, I also include examples of completed forms and two sets of sample operating agreements to help you complete all the necessary documents on your own.Purchase and Download
Iowa Kit Version 2: Using a Traditional Corporation
Occasionally, a business will benefit more from using a corporation rather than an LLC. For those business owners, the corporation version of my do-it-yourself kit provides a complete set of instructions to guide them through that set-up process. Like the LLC kit, this kit comes with completed examples of all the forms involved. It also explains how to balance the pros and cons of incorporating in Iowa. As an added bonus, I include a set of sample corporate bylaws, which can be used by you or your lawyer when crafting your own set of bylaws.Purchase and Download
Additional Information You May Find Useful
If you want additional information about how to maximize the tax savings related to running a business or investment venture, you may also be interested in one of our downloadable e-books (see descriptions below). Each book covers a category of tax planning topics that easily save a business owner significant amounts of income or self-employment taxes (potentially thousands of dollars a year) and is instantly downloadable.
Often the best tax saving tool private companies have? The Section 199A deduction which allows them to avoid taxes on the last 20 percent of their income.Read More
Using an S corporation for your business? To maximize savings, you need to minimize the salary paid to shareholders. But this decision is tricky.Read More
Nearly secret, the federal government's employee retention credits provide tremendous payroll tax savings for most small businesses... A new book from our firm explains.Info here