Tax season is fast approaching and so is the deadline to file your Form 2290. These forms often ask questions that might seem confusing at first. One of the questions you’re asked when you sign up to file is which business type you are filing under? What is a business type and how do you know which one is right for your trucking business?
Below, you will find a helpful guide explaining more about each type to determine which is the best fit for you.
Sole Proprietor or Single Member LLC
To sum it up, a sole proprietor is the single owner of a business.
S-Corporation of LLC as S-Corp
S-Corporations are corporations that elect to pass corporate income, losses, deductions, and credits through their shareholders for federal tax purposes. This allows S-corporations to avoid double taxation on the corporate income.
C-Corporation or LLC as C-Corp
C-Corporation, Under United States federal income tax law, is any corporation that is taxed separately from its owners. Unlike C-Corporations, S-Corporations are not taxed separately.
Partnership or LLC as Partnership
A partnership is where two or more people own the business.
Estates
Estates are all of the money and property owned by a particular person, especially at death.
Trusts and Fiduciaries
A trust is a relationship when one person holds the title to the property. A fiduciary is a person or organization that acts on behalf of another person.
Exempt Organization
In order for an organization to be considered exempt, it must be a charitable organization, private foundation, or other similar organization that is exempt from federal income tax.
What Happens if You Choose the Wrong Business Type?
Don’t worry it happens, we all make mistakes. You can simply click your name in the upper-righthand corner and then click the drop-down arrow. You will then click on “My Account” which will lead you to a page with multiple options. From there select the option titled “Manage Businesses” by clicking on the pencil icon.
When you see the name of the business you want to change, click on the pencil icon to the right of it and it will take you to the page that will allow you to change the business type.
Then under business type select the dropdown and from there you can select the business type that best describes your trucking business.
If you have any questions please call 704.234.6005.
File your 2290 Today!