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Choosing the right business structure is a big deal for entrepreneurs in the US. Two popular options — Limited Liability Companies (LLCs) and Limited Liability Partnerships (LLPs) — both offer liability protection but differ in management, taxation, and who they suit best. Your choice can affect everything from corporate tax services to day-to-day operations, so let’s break it down.

1️⃣ What’s an LLC?

An LLC gives you the best of both worlds: flexible structure + legal protection.

Owners (called members) aren’t personally liable for debts or lawsuits ⚖️

Tax options: taxed as sole proprietor, partnership, or corporation 💼

Less paperwork and compliance hassle compared to corporations 📋

Can have single or multiple members — perfect for startups, e-commerce, consulting, or real estate 🛍️🏠

LLCs are super popular because they balance protection with flexibility.

2️⃣ What’s an LLP?

LLPs are great if you’re a professional teaming up with others — think lawyers, doctors, accountants, and architects.

Partners get protection from each other’s negligence or misconduct 🛡️

Pass-through taxation: profits and losses go straight to partners — no corporate tax layer 🧾

Typically partner-managed — no appointed managers here 🧑‍🤝‍🧑

Common in professional services where trust and shared responsibility matter most

4️⃣ Which Should You Pick?

Go LLC if:

You want strong liability protection

You prefer flexible management

Your business is outside regulated professional fields

Choose LLP if:

You’re a professional working with partners

You want protection from partner negligence

Your state allows LLPs for your profession

Making this choice impacts your business taxes and legal compliance. Always chat with a tax or legal expert to ensure you’re picking the best fit for your goals and state laws.

🔗 Learn more: counto.accountant

Innovation drives growth, but tax rules for R&D expenses just changed! Instead of deducting costs right away, you now capitalize & amortize over years. Here’s the lowdown:

1️⃣ What’s R&D Capitalization?

Before 2022, you could fully deduct your research and development costs in the year they happened. Now, under Section 174 of the Internal Revenue Code, these expenses need to be spread out over 5 years for domestic research and 15 years for foreign R&D. This change impacts businesses across industries, especially those investing heavily in business innovation and new product development.

2️⃣ What Counts as R&D Expenses?

Not all expenses qualify, so it’s important to know what you must capitalize:

Employee wages for staff directly involved in research 👩‍🔬

Materials and supplies used during development 🧪

Software development costs 💻

Contract research fees if you outsource R&D 🤝

Overhead costs tied to R&D activities, like lab rent or utilities 🏢

These expenses still qualify for tax benefits, but now your deductions will come in installments over several years instead of all at once.

3️⃣ How Does This Affect US Small Businesses?

Switching from immediate deductions to amortization can create some financial hurdles:

Reduced tax savings upfront — This can increase your taxable income in the short term. 💸

Cash flow challenges — With deductions spread out, reinvesting in new projects may feel tighter. 😬

More complex tax filings — Expect extra paperwork and record-keeping to stay compliant. 📑

However, you can still benefit from the R&D tax credit — a powerful dollar-for-dollar reduction in your tax bill for qualifying expenses. Leveraging this credit is key to easing the financial impact.

4️⃣ How to Navigate R&D Capitalization

To minimize the impact and make the most of available tax savings:

Plan your tax strategy carefully, considering the new amortization schedule 📆

Maximize your use of the R&D tax credit to offset increased tax liabilities 💰

Keep thorough records of all qualifying expenses and research activities 🗂️

Consult with a tax professional who can help you navigate these complex rules and spot all possible deductions

🔗 Learn more: counto.accountant

If you’re a US small biz owner, knowing about federal excise taxes is a must! These taxes hit specific goods & services — think fuel ⛽️, alcohol 🍷, tobacco 🚬, air travel ✈️, and heavy vehicles 🚛.

Who pays? Importers, manufacturers, retailers, and transport companies usually handle these taxes.

How to stay on track: 1️⃣ Figure out which excise taxes apply to your biz 2️⃣ Register with the IRS if needed 3️⃣ File the right forms like Form 720 quarterly 4️⃣ Pay on time via EFTPS 5️⃣ Keep records for 4 years 📂

Excise taxes are just one part of the puzzle — don’t forget about corporate tax services to keep your finances healthy and compliant.

🔗 Learn more: counto.accountant

If you run a partnership in the US, understanding your tax responsibilities is key to staying compliant and saving money. Unlike corporations, partnerships don’t pay income tax at the business level. Instead, profits and losses pass through to the partners’ personal tax returns.

🔑 How US Partnerships Are Taxed

Pass-Through Taxation: Partnerships file Form 1065, reporting income and deductions, but don’t pay federal income tax themselves.

Schedule K-1: Shows each partner’s share of income or losses, which partners report individually.

💰 Self-Employment Tax for Partners

General partners pay self-employment tax (15.3% in 2025) on their earnings—whether or not they withdraw the money.

Limited partners typically don’t pay this tax unless they’re actively involved in the business.

💸 Guaranteed Payments

Payments to active partners act like salaries, taxed as ordinary income and subject to self-employment tax.

The partnership can deduct these payments as business expenses.

📊 Tax Elections & Deductions

Partnerships can choose cash or accrual accounting methods.

Section 754 election helps adjust asset basis when ownership changes.

Deduct business expenses like rent, utilities, startup costs, and depreciation.

📍 State & Local Taxes

Besides federal taxes, partnerships must navigate varying state and local tax rules, including franchise taxes and additional filings.

Consult an expert to stay compliant.

📌 Summary

Partnerships don’t pay federal income tax directly. Instead, profits and losses flow to partners’ personal returns. General partners pay self-employment taxes; limited partners may have different obligations. Filing Form 1065 and issuing Schedule K-1s is a must. Plus, state taxes vary—stay informed!

⚡ Streamline Your Finances with Counto

Tax time doesn’t have to be stressful. Combine accounting and tax filing in one fixed-price plan. Our AI handles your books daily, while our tax pros handle filing. Need help? Chat with us anytime, email [email protected], or visit Counto.

Sales tax in the US isn’t one-size-fits-all—and if you're running a small business, staying compliant means knowing what counts as taxable. Whether you're selling digital goods, physical products, or services, understanding the difference between taxable and exempt items is key.

🔍 How Sales Tax Works in the US

No federal sales tax—each state sets its own rules

45 states + D.C. impose sales tax; 5 don’t (👋 Alaska, Delaware, Montana, New Hampshire, Oregon)

Local taxes can stack on top of state rates

Sales tax laws change often—stay updated or risk penalties

Need help keeping up? 👉 Explore our sales tax services

🛍️ What’s Taxable?

Physical Goods ✅ Clothing & accessories (some exemptions apply) ✅ Electronics & appliances ✅ Furniture & décor ✅ Restaurant meals & catering

Digital Products 💻 Streaming & subscriptions 📚 E-books, software downloads ☁️ SaaS platforms (in some states)

Taxable Services 🔧 Repairs & installations 💇 Personal care (like haircuts) 🎟️ Event admissions & recreational activities

🚫 What’s Exempt?

Essential Goods 🥦 Grocery staples (not always processed foods) 💊 Prescription meds & medical supplies 📘 Some educational materials

Business Exemptions 🛒 Resale goods 🏭 Machinery for manufacturing or farming

📍 State-by-State Examples

🗽 New York Taxable: meals, electronics, clothing over $110 Exempt: groceries, prescriptions, clothing under $110

🌴 California Taxable: consumer goods, prepared food, digital downloads Exempt: groceries, prescriptions, sales to government agencies

✅ Staying Compliant

Get your sales tax permit

Monitor rate changes

Know your nexus in other states

File and pay on time

Sales tax doesn’t have to be overwhelming—especially with the right tools in place. 💼

📌 Quick Recap

Most physical goods are taxable. Essentials like groceries or medical supplies? Usually exempt. State rules vary—and they change fast. Want help managing all of this? 👉 Let Counto simplify your sales tax obligations.