The beginning of the year marks a fresh start. It marks an opportunity to set new goals, make new plans, and create new habits. It’s also a great time to buy a new business. The first of January is not only a good day to start a new business because of a new year’s resolution, but it also has very specific advantages – all to do with timing.
First of all, if there is an opportunity to save money, wouldn’t you take it? January is known to be the best time to form a new business because there is less red tape. For example, January 1st is a clean start date and allows you to avoid bookkeeping for a few short weeks or months of the year prior. If you did start the business the year before, even if for only a month, you will have to file taxes for that year. Why not wait, and start fresh at the start of a new year?
A tax return for a few short weeks of activity can be incredibly complex and would require the attention of a licensed professional – who is not a cheap expense. In addition to avoiding this, you won’t need to file any profits or losses on your personal income taxes until the following year.
Although this is a popular business start date and state agencies are usually closed for the holidays, some states allow you to file up to 90 days beforehand. In this case, you can beat the rush of lines and chaos at your local state agency. The key is to file your business entity form right now and mark January 1st as the effective date. It allows you to plan, prevent a headache, and establish a clean start date.
For any questions regarding the start of a new business, your local Transworld Business Advisors are here to help. We are getting very close to the start of the new year, so chat with a local San Diego advisor to see what should be your next move. Your business is important to you, so it is important to us.