Frequently Asked Questions
How do I get my business started with NewtonGreene and Associates?
Give us a call and set up an appointment to meet with one of the partners. The initial consultation is free of charge for the first 30 min. We will then send you a packet of valuable information to guide you through the rest of the process.
Why does my CPA require to have a signed Power of Attorney on file?
Having a signed Power of Attorney will allow us to receive a duplicate copy of any IRS notices that are sent to you. This way we can take care of any problems that should arise promptly to avoid penalties and interest. It also allows us to speak to the IRS about any issues concerning your company.
Why do I have to sign an Engagement Letter?
The CPA board requires that we have a signed engagement letter stating the agreement between a client and our company. This contract states our services and fees.
Does Newton Greene & Associates provide payroll service?
No, we do not provide payroll services and we strongly suggest against you doing your own payroll. However, there are several payroll service providers that we can recommend.
As a business owner, I have heard from certain people that I should form an LLC, while other people have told me that I should form an S Corporation. Which one is better for tax purposes?
The reason to form entities such as LLCs and S Corporations is for the legal protections that they provide. We would suggest talking to a qualified attorney first. From a tax perspective, an LLC can be taxed as an S Corporation, C Corporation, Partnership, or a disregarded entity. Although S Corporations can offer some positive tax benefits, great care must be taken in setting one up. The best recommendation that we can give, is to call for a consultation. We offer a free consultation to all new business owners.
What is the difference between an S Corporation and C Corporation? What are the benefits to each of them?
A C Corporation is a separate legal entity. As an individual entity, it can be taxed, sued, and can enter into contractual agreements. S Corporation is a corporation that elects special tax status. The Subchapter S tax election enables the shareholder to pass through earnings and profits directly to their personal tax return. There is no double taxation in the case of S Corporation. S Corporation election allows for reduction of employment tax when distribution is taken instead of salary. Owners of a C Corporation have limited personal liability. C Corporation can raise additional funds through the sale of stock. Non-US Citizen can own or invest in a C Corporation.
When forming a new company, what are the various taxing agencies that I need to be aware of, and how do I register with each one?
Most companies will need a business license, pay personal property tax with the county, pay sales tax, pay federal income tax, pay state income tax in each state in which they do business, pay unemployment tax to the Employment Security Commission of each state that their employees live in while working for your company, withhold federal and state income tax on employees in the states in which they work, pay federal unemployment tax on employees taxable wages. We help clients get set up with each of the agencies that they need to be registered with, and then monitor their necessary filings for compliance.
Do I need to charge sales tax for the services that I provide?
It depends on the industry that you are in, and varies on how you charge. Please call us and we can look into it for you.
Leasing a car through the business – does it make sense? Is it better for the business to lease a car rather than the owner leasing it?
It is usually better to have the lease be in the business’s name. This helps the business establish credit and a track record. However, for many small businesses, the lessor won’t lease in the business’s name (perhaps they haven’t been in business long enough, etc.), so in that case the owner should have the lease in their individual name. In that case, the owner will submit a bill to his own company and have the company cut them a reimbursement check for amounts that are in accordance with IRS prescribed regulations. If the lease is in the business’s name, then the non-business use of the car by the owner will be assigned a value (per IRS specifications) and that amount will be included in the owner’s W-2. As always, the business owner should evaluate how many miles they expect to drive to determine if it even makes sense to lease in the first place.
What is the best way to get money out of my business and into my pocket, other than through payroll so I can reduce the payroll taxes but still get money? I am the business; I should be able to get to the money without being taxed to death
There are multiple levels for getting money out of a business to the owner besides through payroll: Loans and mileage reimbursements are to name a few. Please contact NewtonGreene and we will be happy to assist you
