So, you’re thinking about incorporating your small business.
Maybe you’re just now starting up. Or maybe you’ve been in business for a while and finally think now’s time to finally get that ball rolling.
Either way, once you’ve made the decision to incorporate, it’s now important for you to decide when.
As you’ll see below, this decision depends on your unique business situation.
Who Should Incorporate Their Small Business Immediately?
For some small businesses, waiting to incorporate may leave your business in a vulnerable state.
Certain industries have more liability than others, and if you can even think of one reason where this could be an issue, you should incorporate immediately.
Another reason to go ahead with incorporating? Tax benefits. If your taxes will be greatly lowered by incorporating, that is well worth starting the process early.
But here’s the kicker:
If you incorporate your business before January 1 of the next year, you will need to file two tax returns. File one for the current year beginning January 1 to your official incorporation date. File another from your incorporation date to the end of the year.
Who Should Incorporate Their Small Business on January 1?
If there are no pressing issues surrounding incorporating your business, waiting to incorporate on January 1 would be less work. File once and done!
As you can imagine, January 1 is a very popular date for all who are incorporating their business. If you submit your application on January 1, it can easily become backlogged and take up to 60 days to process.
You can get around this by doing a “delayed filing.” Complete your paperwork now using MaxFilings, and set the incorporation date to January 1. That way your application will be at or near the front of the application pile.
So think about your unique situation and decide what’s best for your business. If protection is important or major tax benefits are afoot, go ahead and incorporate. Remember to file twice!
Or file just once if you’re going with a January 1 start date. Also check with your Secretary of State’s office about delayed filing.
If you aren’t sure if incorporation is the right choice for your business, read our blog post: Why Should I Incorporate My Small Business?