Yes. A Coeur d’Alene Idaho S-Corporation has a perpetual existence that can outlive its original owners/shareholders.
If you bought all the different kinds of Coeur d’Alene business insurance available to you, you’d be broke before you made your first sale. First determine what insurance is required by law, what insurance is required by you landlord or by a lend, what insurance is extremely important, and what insurance you can do without.
Basic fire insurance. Covers fire and lighting losses to your building, equipment, and inventory. Fire premiums vary widely and are based upon the location of your property, the degree of fire protection in your community, the type of construction of the building, the nature of your Coeur d’Alene business and of neighboring Idaho businesses. If you move into a building next to a woodworking or dry-cleaning shop, your fire premiums will be high even if your Idaho-based business is a low fire risk.
- A sprinkler system in your building will sharply reduce your premium.
- Your computer may be covered under a fire insurance policy, but the data in your computer is usually excluded from coverage.
Ordinary income tax is the law’s default setting for income.
When the tax code doesn’t specify that an income qualifies for preferential capital gains rates, it is categorized as ordinary income and therefore subject to tax at your highest marginal income tax rate.
The tax code specifically states that ordinary income includes:
- gain from property that is neither a Capital Asset
- nor business property eligible for preferential treatment
Yes. A Coeur d’Alene Idaho S-Corporations are very strict about who can become an owner/shareholder. In addition, this business entity can only issue one class of stock with a maximum of 100 shares.
Idaho S-Corporations are known for very strict owner/shareholder rules, but it can own almost anything other than another S-Corporation itself.
- S. citizens
- Permanent residents
- Single member LLCs
- Qualified subchapter S trusts
- Testamentary trusts created by a will
- Grantor trusts
- Bankruptcy estates
- Revocable trusts created as part of an estate
Yes. A Coeur d’Alene S corporation cannot provide as many tax-free fringe benefits to shareholders-employees as a traditional “C” corporation. However, a Coeur d’Alene S corporation still provides more tax-free benefits to shareholder-employees than an Idaho LLC taxed as a sole proprietor or partnership. Before you get excited about the fringe benefits of an Idaho S-Corporation, beware that there is also a special rule that applies to shareholders that own more than 2% of the company.
The Two-Percent Rule
Idaho S-Corporations shareholder-employees lose tax-free fringe benefits when they own 2 percent or more of the company.
According to this law an Idaho S-Corporation cannot deduct these payments as business expenses and must treat the payments as taxable W-2 wages paid to the shareholders.
- Cost of group term life insurance coverage up to $50,000
- Contribute to accident and health plans
- Reimburse for meals
- Lodging furnished for the convenience of the corporation
- Establish cafeteria plans
- Contribute to employee health savings accounts
- Reimburse for the cost of qualified transportation
- Adoption expenses
- Moving expenses
Exceptions to the Coeur d’Alene S Corporation 2% Rule
Shareholders that own more than 2% do not lose certain fringe benefits include, payments to pension and profit-sharing plans, compensation for injury, reimbursements for educational assistance, dependent-care assistance, qualified employee discounts, working condition fringe benefits, qualified retirement planning services and on-premises athletic facilities.
- Idaho S corporation shareholder-employees can receive retirement plan benefits based on their earned, W-2 income and not on their shares of the corporation profit.
- pension plans to employees, including shareholder-employees.
- A working condition fringe benefit is an expenditure that would be deductible as an employee business expense if directly paid by the employee. This could be training or education to further their skills for the company.
- Idaho S Corporations can provide a vehicle to a shareholder-employee as a tax-free fringe benefit if only used for business purposes. If using for personal reasons, the fringe benefit turns into taxable income.
- A de minimis fringe benefit refers to small, hard-to-track benefits that an employee receives. This could be coffee, water, snacks or meals in the workplace.
No. A Coeur d’Alene LLC cannot issue stock, nor can they issue stock if elected to be taxed as an Idaho S or C-Corporation.
Phaseout for New 20% Deduction
If your pass-through Coeur d’Alene business is an in-favor business and it qualifies for tax reform’s new 20 percent tax deduction on qualified CDA business income, you benefit always, including being above, below, or in the expanded wage and property phase-in range.
On the other hand, if your Idaho business is a specified service trade or business (doctors, lawyers, accountants, actors, athletes, traders, etc.), it is in the out-of-favor group, and you benefit only when you are in or below the phaseout range.
Once your taxable income exceeds the threshold amounts above, you arrive in one of the four possible categories below:
- Phase-in range for a non-specified service trade or CDA business
- Phaseout range for a specified service trade or CDA business
- Above the phase-in range for an in-favor non-specified service trade or CDA business
- Above the phaseout range for an out-of-favor specified service trade or CDA business
Harness the power to buy online and sell liquidated inventory and merchandise online for your Coeur d’Alene business; it’s fast, easy, safe, secure, and the only technical skill required is to be able to click a mouse. In recent years many merchandises liquidation services have gone live online to provide retailers with fantastic forums, which bring buyers and sellers of liquidated merchandise together to meet and conduct business transactions online. Regardless of if you are looking to sell slow-moving, excessive, or out-of-season merchandise to increase cash flow to purchase you’re most saleable and profitable store items or if you are looking to buy merchandise at incredible savings that are often considerably less than wholesale, then internet liquidation services are a great place to get started on your quest.
How to find online liquidation services.
Additionally, a simple query on any major search engine will reveal hundreds more items for your Coeur d’Alene business. buy merchandise at incredible savings that are often considerably less than wholesale, then internet liquidation services are a great place to get started on your quest.
There are web designers, amateurs and professionals, inn every town in the country. You can hire an individual or a Coeur d’Alene business. Your Idaho business can hire someone who advertises nationally, someone who you never meet in person. Or, as I much prefer, you can hire someone local, who you can meet and work with, face to face.
Get recommendations from other CDA businesses. If you work with a local internet service provider (ISP), they will know, or even heave, people ho design sites. A local computer shop, or the local college computer instructor, can usually recommend web designers.
Three important considerations
- Look at other web sites the designer created. Do they look good? Do they load fast? Do they work well? Consider contacting the web site owners to ask if they’d recommend the designer.
- Do the major search engines find the designer’s web sites and give them prominent listings? A good web designer knows how to design a web site, so search engines find the site.
- Will the designer create a site for you that you can maintain, change, and update yourself without designer’s ongoing assistance?
If your Coeur d’Alene business can provide prospects with a lower price than they are currently paying for a product or service is that enough to win their business? How about if you could give them better service or a better product than what they’re currently getting from a competitor, would that be enough reason for them to come on board?
Now what if your CDA business could combine a lower price and a better product or service, would that be enough incentive for a business to switch to your team and become a customer?
Maybe not, in fact you could have a far superior product or service and a much lower price and still not win them over. Why? Newton’s third law, “For every action, there is an equal and opposite reaction.” When selling into businesses, especially large corporations, you have to carefully consider what reaction(s) there will be resulting from a change in the way business is conducted directly relating to your proposal. Perhaps you sell robotic equipment that can increase line production for a manufacturing company and cut end product costs by 10 percent. That’s great and a good starting point, but what will be the true cost to the manufacturing business if they buy, install, and use the robotic equipment in their manufacturing process? Meaning, what will the opposite reaction be? Will there be down time during installation of the equipment, and how long if ever before this money is recouped? And could that down tine sends their customers to the competition?
Will they have to lay off unionized employees because the robotic equipment will replace humans, and if so what is the buyout package of the employees going to cost? These are just a few questions that would have to be asked and there are many more, but I’m sure you see where this is going.
In this scenario as good as increased production and decreased end product cost would be, there are equal and opposite reaction scenarios that must be considered. Therefore, trying to shift businesses from one product or service to another can be a tough sale; you cannot concentrate persuasion efforts on the obvious, which are generally surface things like price and great service.
Instead, you have to identify what new problems will be created by the shift and have solutions that are 100 percent solid and workable in theory and practice in advance of the sales pitch.