QWhat Type of Business Open in the U.S?

Continuing our discussion on businesses, today I?m going to talk a little about what type of business to open in the U.S. and the basic characteristics of each one: DBA, Corporation, and LLC.

What is a DBA?

Let?s start with the DBA (Doing Business As), also known as Sole Proprietor. This means you operate under a business name using your ITIN or Social Security Number (SSN). However, your business will have a separate identification number.

Advantage

• Low setup cost
• No annual fees

Disadvantages

You must file your DBA tax return along with your personal tax return

Federal tax rates can range from 9% to 37.5%

What is a Corporation?

Corporations are one of the most common types of businesses, especially in Massachusetts. A corporation is a separate legal entity from the individual.

Advantages

• Separate tax return from personal income
• Federal tax rate is around 15%
• Liability is limited to the business itself

Disadvantages

Higher annual maintenance costs in Massachusetts.

Wht is a LLC?

Lastly, we have the LLC (Limited Liability Company), which is slightly more complex because you must choose how it will be taxed:

• As a Corporation
• As a Partnership
• As a Sole Proprietor

Advantages

In Massachusetts, LLCs are commonly used for real estate and other specific cases.

Disadvantages

Higher setup costs and annual fees.

Conclusion

Today, I covered some key points about different business structures in the U.S. to help you understand their benefits and challenges.

If you have any questions, feel free to reach out! We?re here to help.