Great Presentation. Questions. LLC not subject to LLC. When funds a drawn from Equity, does the LLC have to provide a 1099 to owner? That is owner now pays double FICA, and also gets a deduction for health insurance, etc. If LLC is subject to S Corp. rules. does the owner getting the 'dividends' also receives a Int/Dividend 1099? I also understand that a single owner LLC can withdraw from the LLC the funds he/she originally invested in the company without any tax consequences. That, if I invested 50,000.00 in the business and now the business has enough funds to cover overhead, etc and more, the owner LLC can withdraw the $50,000.00 without any tax consequences (yes/no)
If you are in a 22% personal TB and elect for an S Corp tax structure, your dividends are taxed at the long term capital gains rate which would make your total tax burden lower? Right ( let’s hold payments equal; 50k in PI and 50k in dividends )
Great information Thanks. I’m a car hauler. And next year is going to be my first year in business. I think about doing a S Corp for next year. I think I’m going to profit about $ 250k. Don’t want pay taxes on that 😂
Hi Aiden, I hope you're doing well... I have a question for you concerning to haw do you report the spends you have to make to run the Bussines and if there are legal deductions or exclusions that help with de taxable income insuring you are going to pay only the reasonable and more just taxes?
Both! You can make the S Corp election within 2 1/2 months after the LLC is registered, or 2 1/2 months from the beginning of each year. There's no specific rule or timeframe of when you should decide to be taxed as an S Corp--it's always best to talk it over with a tax professional to determine when it's best for your business.
Awesome video I started my company back in April of this year and I've watched several videos on this subject and I think uours is one of the best straight to the point informative video by far. I'm subscribed and cant wait for more of your content
Can I do this to protect me from any future of creditors suing me? I also don't want them to put a lien on my home...can I put my home under a LLC? Also if I fund my LLC with money I received from inhertance...after that money is in my LLC account...is it protected from personal Dept coelctors/being sued for personal Dept.
One more question...IF I am sued for my personal credit fraud ( I max out credit card and don't pay it) is my LLC funds protected?
Thanks for the great vidoe. Really helpful. Two questions: 1) is Member Distribution part of the LLC's expenses, which means we don't pay tax on it because we pay tax based on net profit after all expenses? 2) I'm a lil confused on whether we should allocate taxes (both income tax from net profit and self-employment tax) amount from the 50% we pay ourselves or the other 50%? Thank you.
Thank you for replying. 3 out of 5 YouTubers, in my own experiences, don't reply. So a big thank you to you! If you don't mind, I have another concern: I came across this article yesterday
and the author was able to articulate on a subject of my concern: protection on LLC owner's privacy.
"Despite occasional abuse, Nevada's privacy protections do offer value to the legitimate and law-abiding businessperson. Probably the single greatest benefit of Nevada's privacy protections is that it serves to protect business owners from unscrupulous creditors, aggressive attorneys and frivolous litigation.
The real victory is not to ever be sued. Experienced businesspersons and lawyers know this. Nevada's privacy protections can go a long way in achieving this goal by effectively hiding business owners from public view and thereby protecting them from litigation."
NV's law does protect LLC owner's identity but unfortunately not its officers and managers. And on their article of Organization, owner is required to list initial manager on the form. And as a single member LLC owner, that means our name has to be on the form, which then become public record. NV even require owners to file an Annual List of officers, where all officers names and information are required, which then also become public record.
I have talked to an attorney here in California about this issue but he doesn't really appreciate and recognize my concren on this because his years' of practices did not justify this concern and it's highly unlikely unless you're a celebrity of some sort. I don't want to get racial, but he's a middle-aged caucasian male attorney in an affluent neighborhood so most of his clients probably also fall under that same econimic umbrella. I, on the other hand, is a person of multiple minority background and being discredited for what I said (that's if I event get to talk) and what I do is a regular scene in my everyday life. And to put my small business, which is a website in a very competitive online industry, and a project I've been working on for a very long time with all my heart and soul, under an extra unnecessary layer of risk by exposing my identity on LLC documents is a notion that simply betrays my common sense and conscience. Especially all this can be all avoided by just not showing my name from the get go.
Now after learning the fact that single member LLC's corporate veil is relatively more susceptible to being penetrated (thanks to your another well-done video) , ID protection has become an even bigger concern to me.
I've been debating setting up my LLC among Seattle (lower state tax), Las Vegas (no state tax) and Denver (located in the healthiest state). After watching several of your videos, I'm wondering how is Colorado LLC law in terms of protecting single member LLC owner's privacy, especially when the owner doesn't want to hire an outside manager to manage the business? Thank you and sorry for the long reply. Have a great weekend!
Great question! No, the member distribution is NOT a deductible expense. That's why the IRS taxes all of the profit regardless of whether you've paid it to yourself or not. However, if the LLC is taxed as an S Corp, the reasonable salary portion is a deductible payroll expense (since the payroll taxes are taken out of the salary).
As an S corp, do you have to pay yourself via payroll every month or can you do one 940 and 941 at the end of the year? As for the dividend is that part of payroll? Or can you do member draws outside of payroll and call it a dividend at the end of the year?
So after watching this I was fearful I would have to pay SE tax if I did an LLC for my rental property but I just read that rental properties even when actively managed are considered passive income and not subject to SE tax. Can you please confirm his? Thanks
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