Do-it-yourself Wisconsin S Corporation Kit
Setting up a Wisconsin S corporation is a lot easier than you might think. In fact, you can set up an S corporation yourself, you just need to follow three simple steps:
1. Create an Eligible Entity
You will need an eligible entity to be the base for your S corporation. Both limited liability companies and corporations are suitable bases for S corporations. To form an LLC, fill out an Articles of Organization form, and submit it along with the $130 filing fee to the Wisconsin Department of Financial Institutions. If you want to form a regular corporation, fill out an Articles of Incorporation form and submit the form and the $100 filing fee to WDFI as well. Upon receipt of your form, the Department of Financial Institutions certifies your articles thereby bringing your LLC or corporation to life.
2. Apply for an EIN
After you form your eligible entity, you will need to apply for an Employer Identification number, or EIN. An EIN is like a Social Security Number for businesses. Fill out an SS-4 form to apply, and submit it to the Internal Revenue Service. The IRS provides a free downloadable version of this form on its website.
Tip: During regular work days and work hours, the IRS also often makes available an equivalent online form you can fill out and use to more quickly get an EIN.
3. Make the Subchapter S Election
Once you receive your EIN from the Internal Revenue Service, you can elect for your business to use the tax accounting methods detailed in Subchapter S of the Internal Revenue Code. To make this election, fill out a 2553 form. This form is also available for download from the IRS website. The IRS will evaluate your form to check that you followed correct procedure in making the election and that you are eligible to make the election before you receive S corporation status.
If you feel comfortable completing this process on your own, don't hesitate and get started forming your own S corporation right away. If you would like a bit more coaching or advice, my downloadable e-books may just be exactly what you need.
I created two kits in the form of downloadable e-books describing the S corporation formation process for Wisconsin businesses and entrepreneurs. One illustrates the process of forming an S corporation using an LLC, and the other using a regular corporation.
Version 1: Using an LLC
My default recommendation is that a small business use an LLC as the platform for an S corporation. An LLC is usually easier to administer. An LLC requires less red-tape. And far less fiddle-faddling.
If you accept this recommendation for your Wisconsin business, I recommend the LLC version of the Wisconsin S corporation kit. In this kit, I describe the benefits associated with forming an LLC in Wisconsin as well as the drawbacks. I explain the three formation steps in detail and provide examples of completed forms for reference. I also include a set of sample operating agreements for a single-member LLC, and a set for a multiple-member LLC.
Note: The owners of an LLC are called members.Purchase and Download
Version 2: Using a Corporation
Occasionally, despite the extra work of operating a corporation, a business wants or needs to use a corporation rather than an LLC for an S corporation. To deal with this situation, I provide a corporation version of my e-book as well. In this kit, I describe the positive and negative effects of incorporating in Wisconsin and how to balance them. I provide instructions to guide you through all three steps of the process. I also include a set of sample corporate bylaws, which you or your lawyer may use as a template for your own 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