When starting a new business in Idaho (Idaho S-Corporation or Idaho C-Corporation), something you need to take into account is the Idaho Fringe benefits rules/laws and how to use them to your benefit.
Idaho Fringe Benefits
Health insurance premiums paid by the Coeur d’Alene corporation can be received tax-free by the owners of an Idaho C corporation. A corporation can fully deduct these premiums. Idaho S corporation owners must report these benefits as income and then deduct the premiums from gross income on their individual income tax return, resulting in a “wash” for income tax purposes. While the Idaho S corporation in CDA will receive a full deduction for these premiums, the net deduction passed through to the shareholders will likely be less than their share of premiums unless there is a single owner or equal owners with the exact same cost of insurance.
Long Term Idaho Care and Disability Insurance in Sandpoint
An Idaho CDA C corporation can fully deduct long-term-care and disability insurance premiums without any additional income reported to the owners. Idaho S corporation owners would have to pick up these benefits as gross income for the S corporation to fully deduct these premiums.
Medical Reimbursement Plan
Where most owners of an Idaho C corporation are also employees, a medical reimbursement plan under Sec. 105(b) allows the C corporation to cover all medical expenses not paid for by the insurance plan. As long as the plan is nondiscriminatory, the reimbursements are not taxable to the employees. However, to avoid penalties under the Idaho Patient Protection and Affordable Care Act, P.L. 111-148, beginning in 2014, a medical reimbursement plan generally must be integrated with a group health plan such as:
- health insurance premium
- long-term-care and disability insurance premiums
- medical reimbursement plan
If you are a business in CDA, Rathdrum, Post Falls, Hayden, Athol or Sandpoint Idaho then give CDA Accounting a call to help.
Once you’ve formulated your Coeur d’Alene Idaho business idea and know where you’ll obtain the money to fund your new startup, the next step is following our instructions for starting your business right the first time!
You have 4 choices when selecting a legal structure:
- Idaho Sole Proprietorship (form a Sole Proprietorship Now)
- Idaho Partnership (form a Partnership now)
- Idaho Limited Liability Company (LLC) (form an LLC now)
- Idaho Corporation or S-Corporation (form a Corporation now)
Obtain your Federal Employer Identification Number (FEIN)
If you are set up as an CDA Idaho Corporation, Idaho LLC or Idaho Partnership (or a sole proprietorship with employees), apply for a Federal Employer Identification Number (FEIN) from the IRS. A FEIN will be necessary to open a bank account or process payroll.
Open the Company Bank Account
Select an Idaho bank and open the Idaho company bank account.
Contact the bank before opening the account to see what their specific requirements are to open a business checking account; some banks’ requirements are relatively simple, whereas some banks’ requirements are extremely complex.
Lease an Coeur d’Alene Idaho Office, Warehouse or Retail Space (if not home-based)
Depending on your type of business (retail, office, or warehouse), arrange for office space to be leased. Contacting a commercial Idaho realtor in your area can be helpful. Also, make sure to arrange for utilities and office furniture.
Depending on the type of Coeur d’Alene Idaho business you are in, you may need a Federal license or permit.
Most Hayden Idaho businesses do NOT require a Federal license or permit. However, if you are engaged in one of the following activities, you should contact the responsible Federal agency to determine the requirements for doing business:
- Investment advising
- Drug manufacturing
- Preparation of meat products
- Ground transportation
- Selling alcohol, tobacco or firearms
Idaho State Licenses and permits
Some occupations and professions require a State license or permit. Laws vary from State to State. However, if you are engaged in one of the following professions, you should contact the responsible state agency to determine the requirements for your business:
- building contractors
- insurance carriers
- real estate agents
- private investigators
- private security guards
- funeral directors
- bill collectors
CDA Idaho State Licenses and Permits based on products sold.
Some state licensing requirements are based on the product sold. Contact your Idaho state licensing authorities to determine the licensing requirements of your business. For example, most states require special licenses to sell:
- lottery tickets
Most people engaged in the types of business that require a special State License or Permit are already aware of the requirements (i.e., an accountant is familiar with the licensing requirements for accountants).
Idaho Sales Tax Permit
If your company sells physical products within the state where it does business, you may have to collect and pay sales tax. This is usually accomplished by obtaining a State Seller’s Permit or Resale permit.
Idaho Business License
Most Cities or Counties require you to obtain a business license, even if you operate a home-based business. This is a license granting the company the authority to do business in that city/county.
Hire Employees (if applicable)
If you intend to hire yourself or others as a full or part-time employee of your company, then you may have to register with the appropriate State Agencies or obtain Workers Compensation Insurance or Unemployment Insurance (or both).
Set up an Accounting and Record-Keeping System
Setup your Accounting and Record-keeping system and learn about the taxes your new company is responsible for paying.
Company documents generally are required to be kept for 3 years, including a list of all owners and addresses, copies of all formation documents, financial statements, annual reports, amendments, or changes to the company. All Coeur d’Alene Tax Returns and Corporate Filings should be kept for at least 3 years.
Obtain Business Insurance in Coeur d’Alene
There are many types of insurance for businesses, but they are usually packaged as “General Business Insurance” or a “Business Owner’s Policy.” This can cover everything from product liability to company vehicles. A decent policy can run as little as $300/year and offers an extra level of protection.
Systematize and Organize
Prepare the business as if someone needed to take it over and run it for you. This means having a method to process orders, pay bills, pay employees, pay taxes, maintain your permits, etc. Basically, try to make the operational aspect of the business as automated and efficient as possible so you can concentrate on growing your business.
Develop an Idaho Business Identity
Order Idaho business cards, letterhead, and promotional materials for your Idaho business. A professionally created logo can make your business look professional and established.
Get the Word Out (Marketing)
Now that you’ve set up your Hayden company for success, you need to get the word out. Create a marketing plan for your products and services that targets your ideal customer.