bake - January 2012 - 14

tax tips

The Advantageous LLC
There is one guarantee when opening a retail bakery: You will pay your taxes. But the tax forms you use, what you and your company are liable for, and what monies and properties the IRS can have access to will all depend on the structure of your business. To classify your business structure, ﬁll out a form 8832 and ﬁle it with the IRS service center for your state. There are advantages and disadvantages to the different structures of a business. The limited liability company (LLC) structure offers some distinct advantages. LLCs are business entities allowed by state statute. Therefore, they are not recognized as a business classiﬁcation by the federal government for taxation purposes. For federal tax reporting, LLCs can only be classiﬁed as a corporation, partnership or sole proprietorship. Advantages to the small-business owner are similar to the advantages that a corporation possesses: The member(s) of an LLC have limited personal liability for the debts and actions of the LLC. But unlike the corporation, the LLC does not have When an LLC shows losses, they too are passed through to the members. They can use these losses to offset other income for the current year. There are some limitations, so your best bet is to seek consultation from an accountant. For more detailed information regarding the structure of an LLC visit www.irs.gov/business/ small. Structuring your bakery as an LLC qualiﬁes it for pass-through taxation. In most small-business instances, pass-through taxation offers the best bottom line gains. Pass-through taxation allows for proﬁts made by the LLC to pass through to the owners. This way, rather than double taxation, as it is in the corporate tax structure, only the members — and not the LLC itself — are responsible for taxes, often allowing them to keep more proﬁt. The advantage on losses is better as well. to issue and track stock or hold formal board and shareholder meetings.

TAX FORMS FOR THE LLC SOLE PROPRIETOR Form 1040 schedule C, Proﬁt or loss from business (sole proprietor) Form 1040 schedule E, Supplemental income or loss

WHERE TO FILE FORM 8832

If located in the following states, mail form 8832 to Department of the Treasury Internal Revenue, Ogden UT 84201

If located in the following states, mail form 8832 to Department of the Treasury Revenue Service, Cincinnati, OH 45999

Note: Also attach a copy to the entity’s federal income tax return for the tax year of the election.

14 < JAN 2012 | bakemag.com

http://www.irs.gov/business/small http://www.bakemag.com

bake - January 2012

Table of Contents for the Digital Edition of bake - January 2012

bake - January 1, 2012
Editor's Note - New year, new look
Contents
News bites - Atlantic Bakery Expo Set for March
News bites - D&W Acquires CM Packaging
News bites - Pastry Shop Welcomes New Owner
News bites - Noted Food Expert Shares Top Trends
News bites - PreGel Unveils Frozen Desserts
News bites - Credit Managers Feel the Pinch
News bites - Fewer Need Employee Health Insurance
News bites - Plan Ahead for National Pie Day
News bites - The Passing of a Bakery Legend
Management - Step Away from the Bench
Tax tips - The Advantageous LLC
Labor front - Avoid Penalties With Compliance
Legislation - A Sweet Battle
Blueprint for Change
How to perform a makeover
Prep before you sign
Keeping it in the community
The art of product innovation
Use The Chains
Handmade Hispanic Breads
Artistically Scoring Artisan Bread
Set Yourself Apart With Art
Tempering Couverture Chocolate vs. Coating Chocolate
Inspiration & Insight
Cafe - Upgrade for Higher Price Points
Products
Showcase
Classifieds
Ad Index
bake - January 2012 - bake - January 1, 2012
bake - January 2012 - 2
bake - January 2012 - Editor's Note - New year, new look
bake - January 2012 - 4
bake - January 2012 - Contents
bake - January 2012 - 6
bake - January 2012 - 7
bake - January 2012 - News bites - Noted Food Expert Shares Top Trends
bake - January 2012 - News bites - Plan Ahead for National Pie Day
bake - January 2012 - News bites - The Passing of a Bakery Legend
bake - January 2012 - 11
bake - January 2012 - Management - Step Away from the Bench
bake - January 2012 - 13
bake - January 2012 - Tax tips - The Advantageous LLC
bake - January 2012 - 15
bake - January 2012 - Labor front - Avoid Penalties With Compliance
bake - January 2012 - 17
bake - January 2012 - Legislation - A Sweet Battle
bake - January 2012 - 19
bake - January 2012 - 20
bake - January 2012 - Blueprint for Change
bake - January 2012 - 22
bake - January 2012 - 23
bake - January 2012 - 24
bake - January 2012 - 25
bake - January 2012 - How to perform a makeover
bake - January 2012 - 27
bake - January 2012 - 28
bake - January 2012 - 29
bake - January 2012 - 30
bake - January 2012 - Prep before you sign
bake - January 2012 - 32
bake - January 2012 - 33
bake - January 2012 - 34
bake - January 2012 - Keeping it in the community
bake - January 2012 - 36
bake - January 2012 - 37
bake - January 2012 - 38
bake - January 2012 - The art of product innovation
bake - January 2012 - 40
bake - January 2012 - 41
bake - January 2012 - Use The Chains
bake - January 2012 - 43
bake - January 2012 - 44
bake - January 2012 - 45
bake - January 2012 - Handmade Hispanic Breads
bake - January 2012 - 47
bake - January 2012 - 48
bake - January 2012 - 49
bake - January 2012 - Artistically Scoring Artisan Bread
bake - January 2012 - 51
bake - January 2012 - 52
bake - January 2012 - 53
bake - January 2012 - Set Yourself Apart With Art
bake - January 2012 - 55
bake - January 2012 - 56
bake - January 2012 - 57
bake - January 2012 - Tempering Couverture Chocolate vs. Coating Chocolate
bake - January 2012 - 59
bake - January 2012 - 60
bake - January 2012 - 61
bake - January 2012 - Inspiration & Insight
bake - January 2012 - 63
bake - January 2012 - 64
bake - January 2012 - 65
bake - January 2012 - Cafe - Upgrade for Higher Price Points
bake - January 2012 - 67
bake - January 2012 - 68
bake - January 2012 - 69
bake - January 2012 - Products
bake - January 2012 - 71
bake - January 2012 - Showcase
bake - January 2012 - Classifieds
bake - January 2012 - Ad Index
bake - January 2012 - 75
bake - January 2012 - 76
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