Milestone One: Business Entity, Accounting Method, and Tax Laws
In Module Two, you will submit a draft of your recommendation for the business entity you believe will meet the client's needs, based on your research. You will also select the accounting method that should be used to interpret the business transactions and for tax reporting. You will also need to summarize the tax law pertaining to the entity selected. This assignment will address Section I, Parts A, B, and C of the critical elements above. This milestone is graded with the Milestone One Rubric.
I. Memorandum
A. Use logical reasoning based on your tax research to explain why the client should choose your recommended business entity. Consider referencing appropriate tax code and regulations.
B. Defend your business entity recommendation by describing the accounting method. Consider the advantages and disadvantages of the business
entity based on the following:
Cash basis vs. accrual
The cost to prep the returns
The tax benefits
The limited liability protection
Employee benefits
C. Interpret the tax law pertaining to the type of business recommended and justify your recommendation using details consistent with tax law, code, and regulations.