Small Business Accountants: directory of firms

The IRS lists five common structures: sole proprietorships, partnerships, corporations, S corporations and limited liability companies. The choice drives the return, the self-employment tax position, the payroll obligations and how owners take money out.

S corporation status is the one small businesses ask about most. The IRS describes S corporations as passing corporate income, losses, deductions and credits through to shareholders for federal tax purposes. The election is made on Form 2553, signed by all shareholders; the entity then files Form 1120-S and issues each shareholder a Schedule K-1.

There are eligibility rules, and they are not negotiable: only allowable shareholders, no more than one hundred shareholders, and only one class of stock. An S corporation also puts working owners on payroll, which turns a simple tax filing into a monthly payroll obligation. That trade-off is the actual decision, and it is worth modelling rather than assuming.

Before payroll runs, a business needs a federal employer identification number and registration with each state where it will withhold income tax or pay unemployment insurance. Those registrations take time to issue and cannot sensibly be done in the week of the first payday.

Beneficial ownership information reporting has changed and it is worth knowing where it now stands. FinCEN's current guidance states that US companies are exempt from the beneficial ownership information reporting requirements and are therefore no longer required to file BOI reports, under a final rule effective 14 August 2026. It also states that reporting companies do not need to report beneficial ownership information for US person beneficial owners or US person company applicants.

That is a live area, so check FinCEN's own page rather than relying on an article, and ask your accountant whether anything in your structure sits outside the exemption.

There is no federal sales tax. Every obligation is a state or local one, and a business can be registered in one state and completely unregistered in the next while selling into both.

Since the Supreme Court's decision in South Dakota v. Wayfair, states may require sellers without physical presence to collect. The GAO reported that as of June 2021, all forty-five states with a statewide sales tax and the District of Columbia had adopted requirements governing sales tax collection by remote sellers, and that those requirements vary in effective dates, small-business exemptions and how thresholds are calculated.

For a small business the practical consequence is to track sales by destination state from the beginning, not from the point at which someone raises the question. Unregistered periods do not expire the way a filed return's assessment window does, so the exposure keeps growing quietly.