Restaurant Owner Tax Services

What are the different types of business entities for tax purposes?

The different types of business entities for tax purposes are:

• Sole proprietorship – A simple option where business income is reported on your individual tax return and you pay self-employment tax
• Partnership – Has two or more owners and each partner reports profits/losses on their individual returns
• C Corporation – Requires filing of a tax return separate from your individual return and you may deal with double taxation on your dividends
• S Corporation – Avoids the double taxation issue; income losses deductions and credits pass through to shareholders which are then reported on individual returns
• Limited Liability Company (LLC) – Can be taxed as any of the above options; the number of members also impacts how you file taxes
• Nonprofit – Is exempt from federal income tax but must follow stringent regulations on business practices and usage of funds

How do I keep personal and business finances separate for tax purposes?

Here are a few simple strategies to keep personal and business finances separate for tax purposes:

• Legally establish your business as a separate entity whether it’s an LLC C Corporation or S Corporation
• Maintain bank accounts that are strictly for your business and carry a business debit/credit card
• Don’t combine personal and business purchases and keep receipts for each stored separately
• Keep track of when you use personal belongings for business purposes as this may be a tax write-off

If you’d like custom-tailored tips to help simplify restaurant filing taxes for both the business and owner just get in touch with us here at CloudCPA.

How do I handle taxes for multiple restaurant locations?

How you’ll handle taxes for multiple restaurant locations depends quite a bit on your business structure. If each location is its own separate LLC your tax filing will look a bit different than if you have all locations under the same legal entity.

There isn’t a “one-size-fits-all” solution to this question. Once we know a little more about your goals and current business operations we’ll walk you through the best options for handling your taxes.

How do I report income from my restaurant on my personal tax return?

As a restaurant owner the way you report income from your restaurant on your personal tax return depends on your business structure. Here’s a high-level overview of what that can look like:

• Sole proprietorship – All restaurant income is reported on Schedule C of your personal tax return
• Partnership – Each partner reports their share of income on Schedule E of their personal tax return
• C Corporation – You report your salary on your Form 1040 and dividends are reported on Schedule B
• S Corporation – You report your salary on your Form 1040 and distributions are reported on both your Schedule K-1 and Form 1040
• Limited Liability Company (LLC) – Dependent on the specific structure of your LLC from the above options

No matter what specific structure you’ve chosen for your restaurant we’re here to help. If you’re ready to learn more about how we can simplify your business with restaurant filing taxes for both the business and owner contact us at CloudCPA today.