Do-it-yourself Rhode Island S Corporation Kit
The taxes coming from the Patient Protection and Affordable Care Act and the expiration of the Bush tax cuts mean that many Rhode Island business owners face a significant ride in taxes in the future. However, there is an effective way to keep your businesses' taxes down. S corporations can save small business owners hundreds or thousands of dollars a year in payroll and income taxes. They are also relatively easy to set up. Most business owners can form an S corporation on their own, just by following three simple steps listed here, or scroll further down to get one of the kits with a bit more depth in the process. You can download one for free with no strings attached by using the code stephenlnelsoncpa when you check out!
Step One: Set Up an Eligible Entity
To begin, you need to set up an eligible entity. This will be the foundation for your S corporation. I personally recommend using a limited liability company as the base for your S corporation, though you could also use a corporation or another entity.
To set up your Rhode Island entity, you either fill out an Articles of Organization form to form an LLC, and send it to the Secretary of State's Office in Providence along with $150 for the filing fee. Or, to form a corporation, you fill out an Articles of Incorporation form and send it and the minimum $230 filing fee to the Secretary of State as well. The Rhode Island Secretary of State has PDF versions of both of these forms on its website.
Step Two: Apply for an EIN
After you establish an eligible entity you can apply for an Employer Identification Number, or EIN. To apply for your EIN, fill out a SS-4 form, which you can download from the IRS website, and submit it to the IRS. You should receive your EIN in a month or so.
Step Three: Making the S Corporation Election
When you receive your EIN you can take the final step and make the S corporation election by filling out and submitting a 2553 form, which you can find on the IRS website. This form tells the IRS that you elect to have your business treated using the laws from Subchapter S of the Internal Revenue Code. Submit the completed 2553 form to the Internal Revenue Service Center in Cincinnati, Ohio.
You may not need any more instruction than what I provided above, and if that's the case start forming your S corporation right away. If you need more coaching, my do-it-yourself kits are perfect. I created two do-it-yourself S corporation kits. One explains how to form an S corporation using an LLC, and the other explains how to form an S corporation using a regular corporation.
Option One: LLC Do-it-yourself Kit
As mentioned earlier, I highly recommend using an LLC as the base for your S corporation. LLCs provide some benefits by themselves, and they are also easier to manage than corporations. My LLC kit provides everything you need to form an S corporation without the help of an online incorporation service or expensive attorney. I wrote detailed steps that walk you through the process of forming an S corporation. I also explained the benefits and drawbacks of forming an LLC in the state of Rhode Island. And to further assist you in forming your new business, I added two sets of sample LLC operating agreements. One set is for single-member (meaning single owner) LLCs and the other is for multiple-member (multiple owner) LLCs.Purchase and Download
Option Two: Corporation Do-it-yourself Kit
I also provide a corporation version of my do-it-yourself S corporation kit. This kit analyzes how you would balance the positive and negative effects of incorporating in Rhode Island. It also explains the three steps in detail, and includes examples of filled-out forms for reference. As a bonus, I also included a set of sample corporate bylaws. You or your lawyer may use these bylaws for reference when creating your own corporate 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