Moving out of state and couple other questions

[wizash2]

Hi

My wife started LLC(Single member) in state of New Hampshire end of last year. May end 2013 I became member as well( 50% both of us). It has been updated to state of NH.
Address is of our home only.
This year there is some income coming in company. We expect 100 K turnover this year
So for IRS to be informed what is the best structure (Tax efficient): S Corp, C Corp or partnership?
Also we are moving out of state ( To Virginia), so what is best approach? Start new company over there in VA close this one or what are best approaches?

Thank you very much in advance!

Thanks a lot!

[Freelancier]

As long as you're married, the tax burden will look the same between an S corp and an LLC and a partnership with both of you holding equal shares. As for C corp, there any profits left in the corporation are taxed at the end of the corporation's tax year, but if you later take that money as payroll, you will get taxed again, so there may not be enough benefits to go that route.

As for VA vs. NH, whatever state you create your registered entity in, you need to have a "local agent". Because you'll be living in VA, you would be the local agent there, but in NH, you'll need to find someone to do that for you. And you have to look to see if your business entity has a larger tax burden in NH vs. VA.

Have you considered just getting an accountant? They will be able to answer these questions as well as help you reduce your tax burden.

[Evan]

You should certainly hire a CPA for your tax needs, as you are introducing some complexity here.

If you filed your tax return last year with a Schedule C attached to the 1040 for her business, if you were added you're now a partner (from May going forward). That means a Schedule C for income/expenses from January-date of admission, and date of admission through year-end a form 1065. You could elect to be taxed as a corporation, and actually an S-Corp, but you're now late to make that election for this year (though you may still have some relief under the tax code and get it approved for this year). Not sure why you'd do that, it'd be creating more complexity than you need. As it is, you have no income tax in NH.

VA will be different though -- there is a state income tax. I think it'll make a lot more sense to be incorporated in the state you're doing business. You'll have to pay taxes in that state anyways.

[tallen]

Even if you are incorporated in another state (e.g. NH), you will likely have to register as a foreign entity in the state in which you are actually doing business (e.g. VA)