New Corporation OR "Doing Business As"
I have a New Jersey S-Corp (assume ABC Inc), single owner 100% of shares, incorporated in 2012 with business activity code (NAICS) 541511 (code for computer programming services). My husband uses this for his computer consulting gigs.
I also filed form 2353 when I incorporated, and have been filing 1120s, as a pass through entity.====>Matter of fact, my home state is not NJ so I do not know much about NJ corp tax , incorporating an entity in NJ or etc;however, As you know, an S corp is created by first forming a traditional corporation, and then filing a special form with the IRS to elect ?S? status. Unlike a traditional corporation, an S corporation generally is not subject to separate federal income tax unless the S corp has built-in gains, excess passive income, or passive investment income.So, rather, taxable income from an S corp is passed through to the individual shareholders, and each individual shareholder is subject to federal tax on his or her share of the corporation?s income on his/her 1040. In other words, S corps usually are ?pass-through? entities.
But in the case of NJ, the state does not recognize the federal S election; instead, as mentioned above, in addition to the federal ?S? election form you must also file a NJ election form. Moreover, NJ S corps ,once they owe federal taxes,are also required to pay corp business tax based on NJ gross receipts. Also, independently of any CBT due from the business itself, individual S corp shareholders will owe tax on their share of the company?s net income on their returns
The consulting business is not currently active as of this year 2016 (i.e. no revenue coming in, no salaries being paid, no expenses), but could possibly become active next year, if my husband chooses to stay in consulting, so I do not want to close down the current incorporation ABC Inc.
I, the 100% owner of this New Jersey S-corp, also wish to start a freelance beauty services business in New York, without registering a new corporation. I'm looking to see if I can perform my second new business under the same existing NJ s-corp.======>>Yes you mayYou can put all of the businesses in one entity with multiple DBAs, but you need to avoid doing so also, there is some issue to be considered;simply speaking, there is no reason to do so. Separate businesses need separate legal structures. That?s because, while your existing scorp does the job of protecting you from personal liability, it won?t protect one business from legal claims against the other if they?re operated together. Each entity you formally organize is it's own being as it can be sued, it can sue, it can engage in contractual negotiations, etc. A primary reason to organize as an S corp is to create a roadmap, if you will, as to how the business is going to be managed and operated. Another significant benefit of organization is to limit damages in the case of a lawsuit. Should you organize a parent S corp and then organize subsidiaries and a verdict be rendered against any of the subsidiaries in a lawsuit, the parent company will also be pulled in and any assets (the other subsidiaries) of the parent company can be taken to settle the obligation, so aslongas you have different businesses, organize them independently.
ALSO, remember basically, you need another FEIN for the new freelance beauty svc; One FEIN applies to one entity, just like one SSN applies to one person. You are certainly allowed to add industries, services, etc., but if the other business is a separate entity, it will need its own FEIN. you do not need a second license if both businesses are in the same location, but you do need a second license if you operate two different businesses from two different locations, or even if you operate the same business from two locations.you may contact NJ secretary of state corp division for more accurate info in detail.
I'm going to be doing business for the beauty service under a different name (assume the name for the new division is PQR). I want to have a virtual office in New York, so I can buy appropriate professional and general insurance policy on the New York address.
The beauty services business will also be owned 100% by me. I have a professional license from New York for beauty services. I will be traveling to my customers' addresses in New York to provide beauty services to them. I do not intend to have a physical location in the next foreseeable future.
1. Can i use the same s-corp for two unrelated types of business (computer services and beauty makeup services) ? I know its easier to say register a new business, but I would prefer to use this one if possible.===>As mentioned previously; you mayYou can put all of the businesses in one entity with multiple DBAs, but you need to avoid doing so
2. Since I'm going to be doing business for the beauty service under a different name (assume the name for the new division is PQR), do I need to file form C150G in New Jersey ? C150G form is the alternate name form=>you need to contact
STATE OF NEW JERSEY
DIVISION OF REVENUE for more info in detail.
3. Do I need to file ANY forms in New York as well since the virtual office is going to be in New York ? Which forms need to be filed with New York ?====>In general aslongas you earn taxable income from NYC, I mean The non-resident income threshold for NYC exceeds certain maount, you need to pay tax to NYC as nonresident of NYC and may claim taxes paid to NYC on your NJ return.you need to contact NYC finance dept for more accurate info
4. I spoke to the insurance company and they said for a freelance artist, the address where I store my beauty kit will be the address for the business for insurance purposes. how will that work if I have a virtual office in New York ?====>>>>>>> No virtual office is complete without a professional address to receive mail at; you need not actually reside at the mailing address your mail gets sent to.I guess your home address can be your biz address if you want.
5. Any special considerations that I need to consider while filing taxes (1120s) ?======>> Under the tax code, every U.S. corporation that's in business to make a profit must file a tax return regardless of whether it made any money.
Even though S corps pay no taxes, they must still file a return using Form 1120S to document their profits and losses Just because a corporation has no sales doesn't mean the business has no financial activity to report on a tax return. If you're a startup, you'll likely have costs to write off as business expenses A dormant continuing business may have licensing fees, franchises taxes or other costs it must pay just to maintain its legal right to do business, as well as asset depreciation and amortization expenses it's entitled to claim. It you have no revenue for a given year, these kinds of costs produce a net loss, and the tax code allows you to carry these losses forward to future years, or back to past years, to offset income in those years and reduce your overall tax burden.