Business CPA

Thinking about whether to set up your business as an LLC or a C Corporation? It’s not just about paperwork—it’s about how much you keep in profits, how you pay taxes, and how easy it is to grow your business.

At Insogna CPA, we’ve helped countless businesses across Austin, Round Rock, and surrounding areas figure out the smartest structure for their goals. Whether you’re just getting started or considering a restructure, let’s break it down so you can make a confident, informed decision.

What’s an LLC, and Is It Right for You?

An LLC (Limited Liability Company) is one of the simplest ways to structure a business. It’s flexible, straightforward, and perfect for small businesses looking for liability protection without too much complexity.

What You Get with an LLC:

• Liability Protection: Your personal assets stay safe from business debts and lawsuits.
• Simpler Taxes: LLCs use pass-through taxation, meaning business profits go directly to your personal tax return.
• Flexible Management: No complicated shareholder structure—just you (or you and a partner).

The Catch?

• Self-Employment Taxes: You’ll pay the full 3% self-employment tax on all profits.
• Limited Investment Options: LLCs don’t issue stock, which can make it harder to raise funds.

Example: If your Austin small business earns $100,000 as an LLC, you’ll pay $15,300 in self-employment taxes alone—plus income tax.

What’s a C Corporation, and Is It Right for You?

A C Corporation (C Corp) is a bit more complex but ideal for businesses planning to scale, raise capital, or take on multiple shareholders.

What You Get with a C Corp:

• Easier to Raise Capital: C Corps can issue stock, making it easier to attract investors.
• Liability Protection: Shareholders are shielded from business liabilities.
• Potential Tax Perks: Corporate tax rates may be lower than personal tax rates for certain income levels.

The Catch?

• Double Taxation: Profits are taxed twice—once at the corporate level and again on dividends paid to shareholders.
• More Paperwork: Annual filings, payroll requirements, and strict record-keeping apply.

Example: If your C Corp earns $100,000, it will pay 21% corporate tax ($21,000). If dividends are distributed to shareholders, those earnings could be taxed again on personal returns.

Key Differences Between an LLC and a C Corp (Simplified)

Tax Implications: How Each Structure Affects Your Taxes

LLC Taxes (Pass-Through Taxation)

• All profits pass directly to the owner’s personal return.
• Subject to self-employment taxes (15.3%).

For Example:
If your Austin small business earns $80,000 in profit as an LLC, you’ll owe approximately $12,240 in self-employment taxes.

C Corp Taxes (Potential Double Taxation)

• Profits are taxed at the corporate level (21%).
• If dividends are paid, those earnings are taxed again on shareholders’ personal returns.

For Example:
 If your C Corp earns $80,000, the company pays $16,800 in corporate tax. If dividends are distributed, shareholders would also pay tax on those payouts.

How to Reduce Taxes?
Working with an experienced Austin CPA firm like Insogna CPA can help you explore strategies like balancing salary vs. dividends to minimize double taxation.

When Should You Choose an LLC?

An LLC is often the better choice if you:

• Own a freelance or consulting
• Want simple tax filing with fewer compliance headaches.
• Don’t plan to seek outside investors.
• Operate a real estate investment

When Should You Choose a C Corporation?

A C Corp makes more sense if you:

• Plan to raise capital from investors or venture capitalists.
• Want to offer stock options to employees.
• Need a structure for multiple shareholders.
• Have long-term plans for scaling or going public.

Real-Life Success Scenario: How We Can Help a Local Business Save on Taxes

The Challenge:
 A local marketing agency in Austin, TX wanted to raise capital but was operating as an LLC. They weren’t sure if a C Corp was the right choice due to concerns about double taxation.

The Solution:
 Insogna CPA conducts a full tax analysis to determine that switching to a C Corp would better align with their growth goals. We:

• Filed the final LLC return and transitioned the business to a C Corp.
• Implemented a salary and dividend strategy to reduce double taxation.
• Handled all compliance reporting for their Austin-based accounting services.

The Outcome:

• We can successfully raise $500,000 in investor capital.
• Save $10,000 in taxes through optimized dividend strategies.
• Maintain full IRS compliance with minimal stress.

Still Unsure Which Structure Fits Your Business? Let Insogna CPA Help

Deciding between an LLC and a C Corp is more than just a legal choice—it affects your taxes, your growth potential, and your financial security.

At Insogna CPA, we make complex decisions simple. Whether you’re a small business in Austin or planning to expand, we’re here to guide you through:

✅ Clear Tax Comparisons: No confusing jargon—just straight answers.
✅ Simplified Filings: From LLC setup to C Corp tax planning, we handle it all.
✅ Ongoing Compliance: Stay compliant with quarterly and annual reporting.
✅ Maximized Tax Savings: Proven strategies to help you keep more of your profits.

Ready to Find the Best Structure for Your Business?

You don’t need to guess your way through business structures. Let the experts at Insogna CPA, one of the best CPA firms in Austin, walk you through your options with clarity and confidence.

👉 Contact us today for a free consultation!

Thinking about transitioning your business from an LLC to a C Corporation but feeling lost in the paperwork? You’re not alone.

Moving your business to a C Corp can be a smart strategy—whether you’re planning to attract investors, expand, or optimize your taxes. But the process can feel like a maze, with final LLC returns, short-year filings, and confusing tax elections like QSBS and 83(b) to worry about.

The good news? You don’t have to figure this out alone. At Insogna CPA, we help business owners like you make these transitions smoothly while keeping your taxes under control. Let’s break it down together—step by step.

Why Does an LLC to C Corp Transition Feel So Complicated?

Let’s be real—this process can feel overwhelming because it’s filled with technical tax requirements. Many business owners face challenges like:

1. Filing Your Final LLC Return

When you switch from an LLC to a C Corp, you need to file a final partnership return (Form 1065) to close out the LLC. Miss it, and the IRS could hit you with penalties.

2. Submitting a Short-Year C Corporation Return

Once your C Corp is formed, a short-year return needs to be filed to cover the time between your conversion date and the end of your tax year. It’s a step that often slips through the cracks.

3. Key Elections (QSBS & 83(b))—What Do They Even Mean?

• QSBS (Qualified Small Business Stock) can give you significant capital gains exclusions down the line—if you file it correctly.
• The 83(b) election helps founders minimize taxes on equity grants—but it has a strict deadline.

4. Double Taxation?

C Corps are known for double taxation—once on corporate profits and again when you take dividends. But with smart planning, you can minimize this.

Let’s Break It Down: How Insogna CPA Makes Your LLC to C Corp Transition Easy

Feeling stressed? Don’t worry—this is where we step in. At Insogna CPA, we make complex tax transitions simple for businesses across Austin, Round Rock, and beyond. Here’s how we’ll help you stay compliant while saving you time and money.

Step 1: File Your Final LLC Return—No Loose Ends Left Behind

What Needs to Happen:
 When you close your LLC, the IRS needs a final partnership return (Form 1065) to document the closure.

How We Help:

• Prepare and file your final LLC return so nothing gets missed.
• Issue all K-1 forms to members for reporting their income.

Why It Matters:
 Filing your final LLC return properly means the IRS knows your old business structure is officially closed. It prevents unnecessary tax notices or penalties.

Step 2: Manage Your Short-Year C Corporation Return (Form 1120)

What Needs to Happen:
 Once your C Corp is active, you’re required to submit a short-year tax return for the period from conversion through the end of your tax year.

How We Help:

• File the short-year Form 1120 so you stay compliant.
• Confirm proper income allocation between your LLC and the new C Corp.

Why It Matters:
 This step ensures your C Corporation tax obligations are fully met without lingering issues from your LLC conversion.

Step 3: Make Sure Key Tax Elections Are Filed On Time (QSBS & 83(b))

Qualified Small Business Stock (QSBS)
 If you plan to sell shares in the future, the QSBS election can exempt up to 100% of your capital gains if you meet specific requirements.

83(b) Election
 If you’re a founder receiving stock options or grants, filing an 83(b) election can save you from paying taxes on future appreciation.

How We Help:

• We identify if QSBS applies to your business.
• Prepare and file the 83(b) election to ensure compliance.

Why It Matters:
 These elections can result in massive tax savings—but only if filed on time. Let our Austin CPA firm handle it for you.

Step 4: Avoid Double Taxation with Smart Planning

The Challenge:
 C Corporations are subject to double taxation—on both corporate profits and shareholder dividends.

How We Help:

• Develop a salary vs. dividend strategy to minimize taxes.
• Optimize profit reinvestment for long-term growth.

Why It Matters:
 Proper tax structuring can prevent overpaying and maximize your cash flow.

Real-World Example: How We Can Help a Tech Startup Save Thousands

The Challenge:
 A tech startup in Austin, TX converted from an LLC to a C Corp but missed their short-year return and key elections. They risked losing tax benefits and facing IRS penalties.

How Insogna CPA Helps:

• File their final LLC return and corrected the late short-year return.
• Implement both the QSBS election and 83(b) election for long-term savings.
• Create a profit distribution plan to reduce double taxation.

The Result:

• They can now save over $15,000 in taxes.
• Avoid IRS penalties.
• Gain long-term capital gains protection through QSBS.

Why Choose Insogna CPA for Your Business Transition?

You shouldn’t have to figure out complex tax transitions on your own. That’s why Insogna CPA is here—to make your LLC to C Corp switch smooth, stress-free, and profitable.

✅ Why Business Owners Choose Us:

• Expertise in Business Transitions: We’ve guided businesses across Austin, Round Rock, and beyond through complex structural changes.
• Tax Savings Focused: Our proactive planning helps you minimize tax liability and maximize profits.
• Local Expertise: As a trusted Austin CPA firm, we understand both Texas tax laws and federal compliance standards.

Let’s Make Your LLC to C Corp Transition Easy—Book a Consultation Today

You’ve built a successful business—don’t let tax complexities hold you back from your next growth phase.

At Insogna CPA, we make sure your transition is:
 ✅ Compliant
 ✅ Tax-Efficient
 ✅ Tailored to Your Goals

👉 Ready to make the switch with confidence? Contact Insogna CPA today and let’s simplify your transition—while keeping more of your hard-earned money where it belongs.

Being a 1099 contractor has its perks—freedom, flexibility, and the power to control your income. But it also comes with tax headaches that can catch you off guard. If you’re new to self-employment, you might already be making costly mistakes without even realizing it.

At Insogna CPA, we help Austin Texas contractors like you stay compliant, lower taxes, and avoid penalties—so you can keep more of your hard-earned income. Let’s break down the top tax mistakes we see all the time (and how to fix them).

1. Not Planning for Quarterly Taxes

Ever been hit with a surprise tax bill? You’re not alone.

When you’re a W-2 employee, taxes get automatically withheld from your paycheck. But as a 1099 contractor, you’re responsible for paying self-employment taxes—and the IRS expects you to pay quarterly.

Why It Matters:

• Missing quarterly tax deadlines could mean penalties and interest.
• Paying taxes late can disrupt your cash flow.

Fix It:

• Set aside 25-30% of your income for taxes.
• Mark IRS quarterly deadlines on your calendar (April 15, June 15, Sept 15, Jan 15).
• Not sure how much to pay? A small business CPA in Austin can calculate it for you.

2. Missing Out on Easy Deductions

If you’re not tracking your business expenses, you’re probably overpaying on taxes.

Why It Matters:
 Every business-related expense you don’t deduct means you’re paying taxes on income you didn’t need to.

Common Missed Deductions:

• Home office expenses.
• Business mileage and travel.
• Software subscriptions and tools.
• Continuing education and certifications.

Fix It:

• Keep receipts for everything related to your business.
• Use apps like QuickBooks or Expensify to track expenses automatically.
• Book a consultation with a CPA South Austin to ensure you’re maximizing every deduction legally.

3. Disorganized Bookkeeping

Be honest—are your records all over the place?

Disorganized finances can lead to missed deductions, inaccurate tax filings, and stressful audits.

Why It Matters:

• Disorganized records make it easier to miss deductible expenses.
• If the IRS audits you, you’ll need clear records to back up your deductions.

Fix It:

• Open a separate business bank account for income and expenses.
• Use bookkeeping software like Xero or QuickBooks.
• Set a monthly reminder to review your records or hire an Austin CPA firm to do it for you.

4. Operating Without an LLC

Are you still operating as a sole proprietor?

Many contractors don’t realize how vulnerable their personal assets are without proper legal protection.

Why It Matters:

• If someone sues your business, your personal assets (like your home) could be at risk.
• LLCs offer liability protection while keeping your taxes straightforward.

Fix It:

• Form an LLC in Texas to protect yourself.
• Consult with a CPA in Round Rock, TX to explore the tax benefits of an S-Corp election if your earnings are higher.
• Keep business and personal finances separate for added protection.

5. Paying Too Much in Self-Employment Taxes

If you’re paying self-employment taxes on every dollar you make, there’s a smarter way.

The Reality:
 Self-employment taxes = 15.3% of your net earnings. If you’re making over $50,000 annually, this adds up fast.

Why It Matters:
 Without the right structure, you’re likely overpaying taxes.

Fix It:

• Consider electing S-Corp status.
• As an S-Corp, you can pay yourself a reasonable salary and take the rest as profit distributions—not subject to self-employment taxes.
• Not sure if it fits your business? An Austin accounting service like Insogna CPA can walk you through it.

6. Ignoring Compliance Requirements

If you’re not staying on top of deadlines and reporting, you could be facing costly fines.

Common Oversights:

• Forgetting to send 1099-NEC forms to subcontractors.
• Missing IRS deadlines for quarterly payments.
• Failing to report all income sources.

Why It Matters:
 The IRS doesn’t take missed filings lightly—late payments can result in penalties and audits.

Fix It:

• Stay informed on federal and state filing deadlines.
• Issue 1099 forms to anyone you pay over $600.
• Partner with a professional CPA firm in Austin, TX to stay compliant year-round.

Let Insogna CPA Help You Avoid These Costly Mistakes

You’re great at your work—whether you’re a creative freelancer, contractor, or consultant. But tax laws? That’s where we come in.

At Insogna CPA, we specialize in helping 1099 contractors and self-employed professionals just like you:

✅ Plan for Quarterly Taxes: Stop stressing about deadlines.
✅ Maximize Deductions: We’ll make sure you keep more of what you earn.
✅ Simplify Bookkeeping: Get your records organized and audit-proof.
✅ Optimize Your Business Structure: Discover if an LLC or S-Corp makes sense for you.

👉 Ready to Stop Overpaying Taxes?

Let’s build a tax plan designed for your business. Schedule a free consultation with Insogna CPA today—the best CPA in Austin for 1099 contractors looking to keep more of their money.

Are you feeling overwhelmed by your 1099 tax responsibilities? You’re not alone. Many contractors and freelancers like you dive into the exciting world of self-employment, only to find themselves buried under unfamiliar tax rules, endless forms, and the nagging worry of missing critical deductions.

Here’s the truth: managing 1099 taxes isn’t as straightforward as it was when you were a W-2 employee. Now, you’re responsible for self-employment taxes, tracking expenses, and making quarterly payments. It’s a lot, but don’t worry—you’ve got this, and Insogna CPA, one of the leading Austin, Texas CPA firms, is here to help.

Let’s break it down together.

Why 1099 Taxes Feel So Complicated

If you’re new to earning 1099 income, it’s easy to feel lost. Suddenly, you’re not just running your business—you’re also responsible for every aspect of your taxes.

Does This Sound Familiar?

• You’re unsure how much to set aside for taxes.
• Quarterly payments sneak up on you, leaving you scrambling to catch up.
• You know there are deductions out there, but tracking them feels overwhelming.

And then there’s the fear: Am I going to make a mistake that gets me into trouble with the IRS?

The confusion isn’t your fault. The tax system wasn’t designed to be intuitive, especially for contractors and freelancers. But with a little clarity—and the right support—you can simplify the process, save money, and avoid the stress of tax season.

Let’s Get Clear on What You Owe

First, let’s tackle the basics. When you’re a 1099 contractor, you’re considered self-employed. This means you’re responsible for two main taxes:

1. Self-Employment Taxes: This covers Social Security and Medicare, totaling 15.3% of your net earnings. Unlike W-2 employees, you pay both the employee and employer portions.
2. Income Taxes: These are based on your total taxable income and vary depending on your tax bracket.

Here’s the tricky part: You also need to pay these taxes quarterly, not just at the end of the year. If you don’t, the IRS might hit you with penalties.

Don’t Leave Money on the Table—Maximize Your Deductions

One of the biggest perks of being self-employed is the ability to claim deductions. Every business expense you track is money that stays in your pocket.

Common Deductions You Should Be Tracking:

• Home Office Expenses: If you work from a dedicated space at home, you can deduct a portion of your rent, utilities, and internet.
• Mileage and Travel: Whether it’s driving to a client meeting or traveling for work, those miles add up.
• Equipment and Supplies: Laptops, printers, software—these are all tax-deductible.
• Professional Services: If you hire an accountant or pay for online tools, those expenses count too.

Pro Tip: Use apps like QuickBooks or Expensify to track expenses automatically. If you’re unsure what counts as a deduction, a CPA in Round Rock, TX can guide you through it.

Keep It Simple With Better Recordkeeping

You might be thinking, “This sounds great, but how am I supposed to keep track of all this?”

The secret to stress-free taxes is organized recordkeeping.

• Save receipts for every business-related expense, no matter how small.
• Use a mileage tracker to log your business travel.
• Create separate bank accounts for your business income and expenses.

Here’s Why It Matters: Keeping detailed records doesn’t just make tax season easier—it protects you in case of an audit. With help from a trusted small business CPA in Austin, you can set up systems that work for you.

Feel Like You’re Drowning? Let a CPA Help

You don’t have to figure this all out on your own. A professional CPA can make your life so much easier by:

• Calculating your quarterly tax payments so you never fall behind.
• Finding deductions you didn’t even know existed.
• Helping you plan for taxes year-round, not just at the last minute.

At Insogna CPA, we specialize in helping 1099 contractors like you save time and money. Whether you’re just starting out or looking for ways to improve, we’ve got your back.

Here’s How One Freelancer Saved Over $8,000

Let me tell you about Sarah, a freelance designer in Austin, TX.

Her Problem: She was earning $95,000 annually but felt completely overwhelmed by taxes. She wasn’t sure how much to save for quarterly payments, and she’d been missing deductions for years.

Our Solution:

• We set her up with QuickBooks to automate expense tracking.
• We help her calculate and plan her quarterly tax payments.
• We identified over $8,000 in deductions she had been missing, like home office expenses and software tools.

The Result: Sarah now can save thousands, avoid penalties, and finally feel in control of her finances.

Let’s Make Taxes Easier for You

If you’re feeling stressed about your 1099 taxes, remember: you don’t have to do this alone. At Insogna CPA, we simplify the process, help you claim every deduction, and keep you compliant with IRS rules.

Ready to take the guesswork out of tax season? Contact us today for a free consultation. Together, we’ll create a plan that saves you time, reduces stress, and puts more money back in your pocket.

If you sell on Amazon, you’re always looking for ways to cut costs and boost profits and that includes taxes. Maybe you’ve heard that registering your LLC in Wyoming, Delaware, or Nevada can help you skip state fees and reduce your tax bill.

Spoiler alert: It won’t.

Too many Amazon sellers make this move thinking they’re hacking the system only to end up paying just as much (or more) in taxes thanks to something called business nexus. That’s right: Your LLC’s location doesn’t control where you owe taxes, where you actually do business does.

At Insogna CPA, a leading Austin, Texas CPA firm, we work with Amazon sellers to legally reduce their tax burden without gimmicks that backfire. Let’s break down why registering in a tax-friendly state won’t save you money and what actually will.

The Costly Mistake: Thinking Your LLC’s Location Controls Your Tax Bill

A lot of e-commerce sellers assume that where they register their LLC is where they’ll pay taxes. That’s a big misconception.

What Actually Determines Your Tax Obligation?

• Where you physically run your business (where you live & work).
• Where your inventory is stored (FBA fulfillment centers count!).
• Where you have employees, contractors, or warehouses.

If you live in a high-tax state like California, New York, or Texas and register your LLC in Wyoming, you still owe taxes in the state where you actually operate.

Why Business Nexus Matters (And Why Your LLC’s Location Won’t Save You)

Business nexus is how states determine if your business has a taxable presence—meaning, if you owe them money.

Ways Amazon Sellers Create Nexus Without Realizing It:
 ✔ Amazon FBA Inventory – If your products are stored in a Texas or California fulfillment center, congrats—you have nexus in those states, and you owe taxes there.
 ✔ Sales Volume – Many states have economic nexus laws that trigger tax obligations when you sell over a certain amount (often $100K+ annually).
 ✔ Employees or Contractors – If you have a VA, warehouse worker, or customer service rep in another state, that’s nexus.

Why This Is a Problem
 Even if your LLC is registered in Wyoming, the IRS and state tax authorities will still tax you based on where you actually do business. If you ignore nexus rules, you could face penalties, back taxes, and major headaches later on.

How to Actually Lower Your Amazon Business Taxes (Legally!)

Instead of trying to trick the system, focus on real tax-saving strategies that actually work.

1. Max Out Your Business Deductions

The IRS lets you write off legitimate business expenses so why not take full advantage?

Amazon Seller Tax-Deductible Expenses:

• Amazon seller fees, storage fees, and advertising costs
• Software & tools (Helium 10, Jungle Scout, TaxJar)
• Home office expenses & internet costs
• Business-related travel, meals, and education
• Contractor payments (VAs, designers, copywriters, etc.)

Pro Tip: Most business owners miss deductions that could save them thousands. Work with an Austin tax accountant (like us!) to make sure you’re not overpaying.

2. Consider an S-Corp Election to Reduce Self-Employment Tax

If your Amazon business profits exceed $50,000 per year, switching from an LLC to an S-Corp election could save you thousands in self-employment taxes.

How It Works:

• Instead of paying 3% self-employment tax on all profits, you pay yourself a reasonable salary and take the rest as distributions (which aren’t subject to self-employment tax!).
• You’ll need to set up payroll and file extra tax forms, but the tax savings can be well worth it.

Pro Tip: Not sure if an S-Corp is right for you? A tax advisor in Austin can help you run the numbers and make the best choice.

3. Get Sales Tax Compliance Right (Because Amazon Won’t Do It for You)

Collecting and remitting sales tax properly is crucial but many sellers assume Amazon takes care of everything.

Reality Check:
 ✔ Amazon only collects & remits sales tax in some states, not all.
 ✔ You may still need to register for a sales tax permit in states where you have nexus.
 ✔ Failing to file sales tax returns could lead to penalties, audits, or even Amazon account suspension.

Pro Tip: Use tax software like TaxJar or Avalara, or consult a small business CPA in Austin Texas (like us!) to ensure compliance.

4. Choose the Right State for Your LLC (If You Need One at All)

For most Amazon sellers, registering your LLC in your home state is the easiest and most compliant option.

Best Practices for LLC Formation:
 ✔ If you live and operate in a state: register your LLC there.
 ✔ If you operate in multiple states, consider Texas or Florida (both have no state income tax and business-friendly laws).
 ✔ If you need an investor-friendly setup, a Delaware C-Corp may be the best option.

Pro Tip: Every business is unique. Get personalized guidance from an Austin CPA firm to ensure you’re making the right choice.

Final Thoughts: Stop Falling for Tax Myths And Use Strategies That Actually Work

Registering your LLC in Wyoming won’t magically erase your tax bill, but smart tax planning can help you keep more of your hard-earned profits. Instead of risky workarounds, focus on legal, effective strategies like:

✔ Maximizing deductions to reduce taxable income
✔ Considering an S-Corp election if profits exceed $50K
 ✔ Getting sales tax compliance right
 ✔ Choosing the right LLC state based on where you actually do business

At Insogna CPA, a leading Austin accounting firm specializing in e-commerce tax strategy, we help Amazon sellers:
 ✔ Lower their tax liability legally
 ✔ Stay compliant with state and federal tax laws
 ✔ Optimize tax elections for maximum savings

Want to stop overpaying in taxes? Schedule a tax strategy session with Insogna CPA today and let’s optimize your Amazon business taxes!