Things You Should Know About Personal-Service Corporation Tax ID

Everyone is keen in looking for ways to handle their taxes better, save some extra pennies on tax and get the maximum possible benefit. When you are looking for filing your taxes for a new corporation, there are few terms you should know about such as Personal-Service Corporation tax ID and how it can benefit you. One of the most essential things is to apply for a federal tax id before you plan to file taxes for your new corporation.  Most people don’t have clarity when it comes to tax filing and the procedures for it. Few go for a tax consultation and the rest look for other available options within reach. We share with you the things that you should know about Personal-Service Corporation tax ID and its benefits.

Personal Service Corporation Tax

What is Personal-Service Corporation?

A Personal-Service Corporation is a business entity that is created for the purpose of providing personal services to individuals or groups. These personal services can include any activity performed in the following fields: law, health, consulting, engineering, accounting, architecture, actuarial science or performing arts etc. A personal-service corporation enjoys a number of benefits from the IRS. In order to enjoy the benefits, you need to register for a personal-service corporation tax ID. Let’s see what a personal-service corporation tax ID is and how to use it.

Personal-Service Corporation tax ID:

In order to file taxes, you need a federal tax ID that will identify your entity in the eyes of the government. If your company is a personal-service corporation then you will need a personal service corporation tax ID, which is almost same as an EIN number, used for all tax purposes. But before you apply for one, you should know if your corporation is eligible to register for a Personal-Service Corporation tax ID.

Is your entity a personal-service corporation?

A personal-service corporation is a unique corporation that receives tax benefits if it can meet the following IRS ownership requirements:
  1. The employee-owners must perform at least 20% of the personal services themselves.
  2. Its principal activity during the testing period is performing personal services. The testing period for any tax year is generally the prior tax year.
  3. The employee-owners must also own at least 10% of the outstanding stock of the personal-service corporation on the last day of the initial one-year testing period.

Who is an employee-owner?

A person is called an employee-owner of a personal-service corporation if the following conditions apply:
  • They are an employee of the corporation or perform personal services for, or on behalf of, the corporation (even if they are an independent contractor for other purposes) on any day of the testing period.
  • They own stock in the corporation at any time during the testing period.
If your entity meets the above conditions then it can be considered a personal-service corporation and is eligible to register for a personal-service corporation tax ID.Now that you are all set to apply for a personal-service corporation tax ID and you might be wondering if there is anything else you need in order to apply for this ID.

To apply for a Personal-Service Corporation tax ID:

Additionally, there are few more things that you might need to register your entity for a Personal-Service Corporation tax ID, such as:
  1. Your employees must have individual tax ID’s as the taxes will be collected from the company and the employees as well.
  2. The EIN for the employees is usually same as their social security number.

How long does it take to get a Personal-Service Corporation tax ID?

You might feel is as a tedious process and might back-out from getting into the trouble but actually it’s an easy process. If you want to opt for a quick and hassle-free way then go for the online mode. All you need to do is follow these steps:
  1. Go to IRS website and apply online for a personal-service Corporation tax ID.
  2. You can easily complete the entire process yourself and if you’re not sure then delegate the task to a trusted accountant.
  3. Once done with the online form filling, you can get your tax ID immediately.
There is another alternate way which is not as fast as online option. You can apply via fax or mail but the waiting period is quite long which can go up to several weeks to receive your tax ID.

Summing up:

It is indeed essential to know about your corporation type so as to get the maximum benefits. You have learnt that a personal-service corporation has numerous benefits and how you can get a tax ID. There are different benefits for different corporations and their field of work. One such field is creative/fine arts or photography, in which any current expenses you incur pursuant to creative work are deductible for the corporation but either you or your family members must hold all or nearly all of the corporation’s outstanding stock. This rule does not apply to other types of personal-service corporations.]]>

How to Improve Your Credit Score Fast– Learn the Tips & Tricks

A good credit score cannot be built in a single day. Building your credit score won’t be easy as cooking instant noodles, where you can do little work and instantly get the result.

To build a good credit score it requires a lot of work. It takes time, so no quick fix for it. Seeing any improvement in credit score could take 60-90 days depending on your past behavior.

Is your credit score below 760? You want to achieve this magic number?? There are things you need to work on it now, to improve your credit score in next 3 months.

How to Improve Your Credit Score Fast

Few important steps you need to take right now.

Check Your Credit Reports Regularly–

You need to check your credit report regularly and fix the errors there to improve your credit score. In case you haven’t done that, you can request a free copy of your credit report and check it to find any errors present.

Do you know? 5% percent of consumers had an error on their three credit reports.

Sometimes your credit report may contain errors which might affect your credit score as it contains the data used to calculate your credit score. One tip is to make sure that there are no late payments which are incorrectly listed for any of your accounts and that the amounts owed for each account are correct.

Setup Payment Reminders

You always need to make your credit payments on time as it is one of the biggest contributing factors to your credit scores. Few banks are there who offer payment reminders through their online banking portals which help you to remember when your payments are due. You can also enrol to pay automatic payments through your credit card and can enable loan providers to have payments automatically debited from your bank account.

Reduce Your Debt Amount

This might be the most difficult of all the tasks but reducing the amount that you owe is going to most important tool to improve your credit score. Initially, you need to do is stop using your credit cards. You can use your credit report to make a list of all your accounts and then determine how much you owe on each of your accounts and identify what interest rates they are charging. You need to initiate a payment plan that gives more importance to paying debts of the highest interest cards first while at the same time maintain minimum payments on your other accounts.

In addition to making these right moves, you also have to make sure that you are consistent on your plans. Mentioned below are few easy techniques which can improve your score –

 Negotiate with your creditors –

You can consult your creditors to delete any kind of debts which are pending. Notify them that you will be paying the remaining balance if and only the creditor will mark all your debt as paid or maybe even totally remove it.

Become an authorized user

You can always opt for one or two pieces of plastic, it will do good things to your credit score. This will happen only if you don’t charge too much and pay your bills on time. In other words, you definitely have to be a responsible user of credit.

You can declare to put an agreement in writing. In the agreement, you can state how much you can spend and how you will pay your share of the bill to the cardholder. Then the most important part is to do honour your agreement and use the card responsibly.

Under-use your cards –

You need to be responsible use your card and make sure that the “credit utilization ratio” is not more than 30% and ideally even less. This will help you become financially rich.

Raise your credit limit –

You can always your creditors to increase your limit. You can make your Mastercard good for up to $3,000. But you need to be cautious in this case as it works only if you can trust yourself not to increase your spending habits.

Final Words

Bad credit scores have no easy fixes. The fact is that you don’t rebuild the credit score, in fact, you rebuild your credit history, which then reflects your credit score. The time taken to rebuild your credit history depends mainly on the reasons behind the change. The negative changes in credit scores occur mainly due to the addition of a negative element to your credit report which might include things such as a delinquency or collection account. Except for bankruptcies and unpaid tax liens, most public record items remain on your credit report for seven years. Whereas inquiries remain only for two years on your report.