Understanding Your Tax Entities

By February 10, 2020 February 21st, 2020 Profit First

Tax Entities… What are they and why should I care?

 

Let’s cover the “WHAT” first…

When I say “tax entities” what do I mean by that?

Well, I am talking about your LLC’s, your S Corporations, your C Corporations, often even soul proprietorship is lumped in with that as well.

 

The is where we get to the “WHY should I care” part of the conversation.

The IRS tax code is going to apply different tax rules to those different entities in different ways. There are of course pros and cons to each entities. The more you understand about each of the entities the clearer you will be as to which is the best path for you

It is really important that you Categorize yourself correctly in order to receive the highest benefit to your gym come tax time. We recommend that Gyms Owners establish themselves as S Corporation. If you have other partners there are other avenues I recommend (watch the video below, I go into a bit more detail). Basically though, you want to make sure that you have an S corporation established somewhere in your structure.

 

The goal in all of the is to reduce your self employment tax, which is what an S corporation helps you do. I have seen a lot of poorly structured gyms struggling because their foundation wasn’t solid.

 

If you are interested in learning more or would like to know what the best structure for your gym is, feel free to reach out to us. We would be happy to help.

Check out our other videos for information on the Profit First system and on Reading your Financial Statements

 

In my new book, Profit First For Microgyms, I break down Mike Michalowicz’s proven method, so that it is easily digestible by our Microgym owner community.

 

You can order your copy today by clicking here. 

 

Interested in more tips and advice on how to better manage the financial health of your microgym? 

 

I would LOVE to connect.

 

I share daily tips and advice not only for Microgym owners but for all of us being bullied by the IRS.

 

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