Business Formation & Entity Selection

Choose the right business structure from day one. Work with a CPA, not just a registered agent.

No commitment Encrypted portal 1–2 business day response

5.0 · 17 Google ReviewsNJ CPA Firm Lic. #20CB00789800

Quick Answer

Since December 2022 (P.L. 2022, c.133), NJ automatically recognizes federal S-Corp elections - no separate CBT-2553 required. Pre-12/22/2022 entities that never filed the old CBT-2553 may still default to C-Corp treatment for NJ CBT purposes.
For an ordinary nonfarm sole proprietor, Schedule C profit generally enters Schedule SE at 92.35%. If Schedule SE line 4c is $400 or more, the 12.4% Social Security component applies up to the remaining wage base and the 2.9% Medicare component generally applies without that cap. An S-Corp comparison must model reasonable compensation, payroll taxes, QBI, income-tax offsets, NJ costs, and compliance costs on the owner's actual facts.
NJ LLCs and LPs must file an annual report with the NJ Division of Revenue and pay a $75 annual fee - failure to file can result in administrative dissolution of the entity.
QSBS under IRC §1202 requires C-Corp status from inception - founders who start as an LLC and later convert may lose eligibility for the $10 million capital gains exclusion on qualifying stock held 5+ years. Note: OBBBA changed §1202 for stock acquired after July 4, 2025 - a tiered exclusion of 50%/75%/100% at 3/4/5-year holds, a per-issuer cap raised to $15M (inflation-indexed), and a gross-asset ceiling raised to $75M. The $10M/10x/5-year rule still applies to stock acquired on or before July 4, 2025.
New NJ businesses must register with the NJ Division of Revenue (NJ-REG) to obtain a NJ tax ID for income tax withholding, unemployment insurance, and sales tax (if applicable) - this is separate from the federal EIN.

Overview

Business formation tax planning involves selecting the optimal legal structure for your business based on your tax situation, ownership, and growth plans. Monaco CPA provides entity selection analysis, S-Corp election filing, NJ business registration guidance, and first-year tax planning for new NJ businesses.

The entity you choose for your business affects how much tax you pay, how you are protected legally, and how your business is valued when you eventually sell. Making the wrong choice on day one creates expensive problems that can take years to fix.

A CPA-guided approach covers the tax implications of each structure, not just the legal formalities. This includes entity selection analysis, coordination with NJ business attorneys for formation documents, S-Corp election filings, and accounting system setup.

Monaco CPA serves new business owners across New Jersey who want to start correctly, whether you are launching a side hustle, going full-time, or spinning off a new entity.

Personal Review

Tell Greg what you need help with

Share the basics through the contact form and expect a response within 1–2 business days with a clear next step.

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What's Included

Entity type analysis (LLC, S-Corp, C-Corp, sole proprietor)
NJ-specific entity tax comparison (CBT, BAIT election)
Federal S-Corp election (Form 2553)
NJ S-Corp status verification (auto-recognized since P.L. 2022, c.133; DORES registration + IRS proof required)
EIN application with IRS
NJ business registration guidance
Initial chart of accounts setup
Estimated tax payment schedule for year 1
Payroll setup guidance for S-Corp owner-employees
First-year tax planning consultation

How It Works

A clear, fixed process from first contact to filing - you always know what happens next.

1
Entity Analysis
I analyze your projected income, ownership structure, state nexus, and growth plans to model the tax cost of each entity type.
2
Formation & Elections
I handle S-Corp and C-Corp election filings with the IRS and NJ, and coordinate NJ business registration with your attorney.
3
Accounting Setup
Bookkeeping system setup includes chart of accounts and payroll structure so you are compliant from day one.
4
Year-1 Tax Planning
I project your first-year tax liability, set up quarterly estimated payments, and ensure you are maximizing available deductions from the start.

Frequently Asked Questions

What is the tax difference between an LLC and an S-Corp in NJ?

A single-member LLC is taxed as a sole proprietorship by default. For an ordinary nonfarm business, Schedule C profit generally is multiplied by 92.35% on Schedule SE; if line 4c is $400 or more, Social Security tax applies up to the remaining 2026 wage base and Medicare tax generally applies without that cap. An S-Corp pays the owner a reasonable W-2 salary subject to payroll taxes, while qualifying distributions are not subject to FICA. Whether the election saves money depends on compensation, payroll and return costs, QBI and income-tax offsets, NJ CBT and payroll taxes, and the owner's full return.

When should I elect S-Corp status?

There is no universal income threshold for an S-Corp election. Model the sole-proprietor Schedule SE result against payroll taxes on supportable reasonable compensation, then recompute QBI, the half-SE-tax deduction, income tax, NJ CBT and payroll taxes, and annual compliance costs.

Is there a NJ-specific S-Corp election?

No longer. P.L. 2022, c.133 (effective December 22, 2022) eliminated the separate NJ S-Corp election. Federal S-Corp status now automatically carries through to NJ. You still need DORES registration as a '1120 Filer' and proof of federal S-Corp status (CP261 or 385C). If your entity was formed before 12/22/2022 and never filed the old CBT-2553, NJ may still treat you as a C-Corp - see our NJ S-Corp election guide for how to correct this.

Should I use a C-Corp if I am raising venture capital?

C-Corps (specifically Delaware C-Corps) are the standard for venture-backed startups because they allow multiple stock classes, QSBS exclusions under IRC section 1202, and cleaner cap table management. If you are planning a VC-backed startup, a Delaware C-Corp is almost always the right choice.

Can I change my entity type after starting?

Yes, but timing and method matter. Converting from an LLC to an S-Corp is common and can usually be done prospectively. Converting from an S-Corp to a C-Corp ends pass-through treatment and generally starts a 5-year wait before S status can be re-elected (IRC Section 1362(g)); it is the reverse move - a C-Corp electing S status - that triggers the 5-year built-in gains tax recognition period under IRC Section 1374. I can model the tax cost of conversion options.

"Greg was very easy to work with. I had a complicated scenario that he was able to manage, with complete confidence. I would highly recommend using him."

Justin K.

These reviews reflect individual experiences and do not guarantee similar outcomes. Results vary based on each person's specific facts and circumstances. No reviewer was compensated for providing a review. Tax savings and outcomes depend on individual tax situations and are not typical of all engagements.

Ready to Get Started?

Start with the contact form. I will review your situation and reply within 1–2 business days with a clear next step.

Get Started View Pricing

No commitment Encrypted portal 1–2 business day response

Use of this website does not create a CPA-client relationship.

Tax advice disclaimer: This material is for general educational information only and is not legal, tax, or accounting advice for your specific facts. A CPA-client relationship is formed only through a signed engagement letter.

Business Formation & Entity Selection

Choose the right business structure from day one. Work with a CPA, not just a registered agent.

Get Started View Pricing

No commitment Encrypted portal 1–2 business day response

5.0 · 17 Google ReviewsNJ CPA Firm Lic. #20CB00789800

Quick Answer

Since December 2022 (P.L. 2022, c.133), NJ automatically recognizes federal S-Corp elections - no separate CBT-2553 required. Pre-12/22/2022 entities that never filed the old CBT-2553 may still default to C-Corp treatment for NJ CBT purposes.
For an ordinary nonfarm sole proprietor, Schedule C profit generally enters Schedule SE at 92.35%. If Schedule SE line 4c is $400 or more, the 12.4% Social Security component applies up to the remaining wage base and the 2.9% Medicare component generally applies without that cap. An S-Corp comparison must model reasonable compensation, payroll taxes, QBI, income-tax offsets, NJ costs, and compliance costs on the owner's actual facts.
NJ LLCs and LPs must file an annual report with the NJ Division of Revenue and pay a $75 annual fee - failure to file can result in administrative dissolution of the entity.
QSBS under IRC §1202 requires C-Corp status from inception - founders who start as an LLC and later convert may lose eligibility for the $10 million capital gains exclusion on qualifying stock held 5+ years. Note: OBBBA changed §1202 for stock acquired after July 4, 2025 - a tiered exclusion of 50%/75%/100% at 3/4/5-year holds, a per-issuer cap raised to $15M (inflation-indexed), and a gross-asset ceiling raised to $75M. The $10M/10x/5-year rule still applies to stock acquired on or before July 4, 2025.
New NJ businesses must register with the NJ Division of Revenue (NJ-REG) to obtain a NJ tax ID for income tax withholding, unemployment insurance, and sales tax (if applicable) - this is separate from the federal EIN.

Overview

Monaco CPA serves new business owners across New Jersey who want to start correctly, whether you are launching a side hustle, going full-time, or spinning off a new entity.

Personal Review

Tell Greg what you need help with

Share the basics through the contact form and expect a response within 1–2 business days with a clear next step.

Get Started View Pricing

No commitment Encrypted

What's Included

Entity type analysis (LLC, S-Corp, C-Corp, sole proprietor)
NJ-specific entity tax comparison (CBT, BAIT election)
Federal S-Corp election (Form 2553)
NJ S-Corp status verification (auto-recognized since P.L. 2022, c.133; DORES registration + IRS proof required)
EIN application with IRS
NJ business registration guidance
Initial chart of accounts setup
Estimated tax payment schedule for year 1
Payroll setup guidance for S-Corp owner-employees
First-year tax planning consultation

How It Works

A clear, fixed process from first contact to filing - you always know what happens next.

1
Entity Analysis
I analyze your projected income, ownership structure, state nexus, and growth plans to model the tax cost of each entity type.
2
Formation & Elections
I handle S-Corp and C-Corp election filings with the IRS and NJ, and coordinate NJ business registration with your attorney.
3
Accounting Setup
Bookkeeping system setup includes chart of accounts and payroll structure so you are compliant from day one.
4
Year-1 Tax Planning
I project your first-year tax liability, set up quarterly estimated payments, and ensure you are maximizing available deductions from the start.

Frequently Asked Questions

What is the tax difference between an LLC and an S-Corp in NJ?

When should I elect S-Corp status?

Is there a NJ-specific S-Corp election?

Should I use a C-Corp if I am raising venture capital?

Can I change my entity type after starting?

"Greg was very easy to work with. I had a complicated scenario that he was able to manage, with complete confidence. I would highly recommend using him."

Justin K.

Ready to Get Started?

Start with the contact form. I will review your situation and reply within 1–2 business days with a clear next step.

Get Started View Pricing

No commitment Encrypted portal 1–2 business day response

Use of this website does not create a CPA-client relationship.

What Google Reviewers Say About Gregory Monaco, CPA LLC

Business Formation & Entity Selection

Quick Answer

Tell Greg what you need help with

What's Included

How It Works

Entity Analysis

Formation & Elections

Accounting Setup

Year-1 Tax Planning

Frequently Asked Questions

Related Articles

LLC vs. S-Corp in New Jersey: Which Entity Structure Is Right for Your Business?

S-Corp Salary vs. Distributions: Getting the Balance Right in 2026

S-Corp Health Insurance: How to Report It Correctly on Your W-2 in NJ

Ready to Get Started?

Business Formation & Entity Selection

Quick Answer

Tell Greg what you need help with

What's Included

How It Works

Entity Analysis

Formation & Elections

Accounting Setup

Year-1 Tax Planning

Frequently Asked Questions

Related Articles

LLC vs. S-Corp in New Jersey: Which Entity Structure Is Right for Your Business?

S-Corp Salary vs. Distributions: Getting the Balance Right in 2026

S-Corp Health Insurance: How to Report It Correctly on Your W-2 in NJ

Ready to Get Started?