You can file your LLC or Corporation for FREE using the links below! If you use the links, you can receive up to $100 off any additional services you may want to add: Inc Authority: bit.ly/incauthoritycoupon IncFile: bit.ly/incfilecoupon Zenbusiness: bit.ly/zenbusinesscoupon Northwest Registered Agent: bit.ly/northwestregisteredagen... BetterLegal: bit.ly/betterlegalcoupon Also, the due dates for when to file the various tax documents have recently changed and I misspoke in this video. The correct due dates are as follows: Sole Proprietorship: April 15th S Corporation: March 15th Partnership: March 15th C Corporation: April 15th
I work at a law firm that specializes in asset protection and business structuring, and you were spot on I am glad you used the different colors for the electives taxation and what is default for new business owners this is hard for people to understand. Thank you for taking the time to do this explanation video.
Man you are an incredible Teacher. Easy to understand and follow. You explain this stuff really well, and even the way you use your hand as brackets to discus a particular structure is super cool. I'm trying to start my enterprises up and spent hours finding the right corporation to file and this was the vid that made it all click for me. Thanks a TON man. So humble and grateful right now.
Great Video Navi, super informative and I appreciate you mentioning that most people make the switch at about $40k to opt into being taxed like an S-Corp. Super helpful!!
Thank you. I've got other videos in my library breaking down the reason why $40k makes sense. Here is a link to that video if you want to check it out: ua-cam.com/video/QFYFGfHOuwI/v-deo.html.
Love the visual and your verbal explanation. It's so true that there is so much bad info out there. I cringe when I hear someone say their company is S-Corp because that's not a business entity and rather a tax structure. Thank you for putting this video together and sharing with the masses! Saving it and will be sharing it with others.
Hey Navi! Thanks for posting this video. I've seen so many of people making these videos and they are so convoluted and hard to follow. My one recommendation is for you to state where you work- a lot of people may want to hire you but if they don't realize you're local or certified in their state, they may not even bother going to your website. Thank you for taking the time to educate us. All the best! Tom Brooklyn, NY -NYC Video Podcast
Thank you SOOO much for this video!! This is super helpful. I am starting a business with a partner that lives in another state and wanted to make sure we set everything up correctly. I have spent hours researching this and this video was THE MOST HELPFUL in breaking down the different types of entities and where to start out. I feel like I finally have some clarification. Thank you again!
Excellent diagram and explanation. I haven't seen anything explained this well. These UA-cam attorneys just throw out terms like "schedule c" and "1065" like your supposed to know without ever explaining what's what.
Great video. My wife and I are nurses. We work as self employed 1099. I could open a single member LLC and do S election. And they both work in the same LLC as an S corp. And that the 1099s are reported from both of them through the S Corp. Then the S corp generates w2 for each one and the dividends pass through K1 to the owner. Or each would have to open their own LLC and make S election. thanks
Navi one of the missed information that most all of us don't received is that we have to pay $ annually to our Estate if we decide to file and articles or be treated as S Corp if we want to save money on taxes.
Very helpful man! Thanks! Even wrote down all these notes since I am going to have to start doing taxes for my business and side business. Once again thank you very much for this!
3 questions: Does the owner of a C-corp have to take a salary? Example: The owner of one major company said he didn't pay personal taxes because he didn't take a salary. Can you change an llc to a corp as it grows? Reason: if I formed a company now it might be a couple years before it could afford a "reasonable salary" for me. Does a C-corp have to offer its shares for sale or can it remain private, in the hands of 1 or 2 owners? The reason for this is that there are distinct advantages of the C-corp that are beyond the scope of taxes and liability protection.
when entering vendor w9's into an ERP acctng software for these fed tax classifications, are S Corp's and partnerships; to be treated as exempt? (for when the 1099's get produced year end)? And if so, are these the only 2?
I have a separate video that discusses if a 1099 needs to be issued or not. Do a search for that video and it may answer your questions - it's not a straightforward answer or else I would provide the answer here.
What if I have a company in India and I wanna setup a subsidiary in US so what steps should I be taking? I don't know much about SCORP, CORP, LLC.... In India we have structures like PVT. LTD, LLP, sole proprietorship, partnership, HUF, etc.
Hey Manas...sorry, I'm not an expert with this type of structure so I would defer to someone else that is familiar with setting up entities in the US for non-residents.
One correction that needs to be made is that a C-Corporation’s tax return due date is 4/15 just like 1040 due date. Only partnership and S-Corp tax return due date is 3/15.
I'm confused. It seems an S corp simply passes the tax burden on to the single member owner. Could you clarify how the owner (now an employee of the S corp) will get reduced taxes.
We just started a single member LLC. We would like to open a business credit card but we have to choose between corporation, partnership, and sole proprietorship for the company structure on the credit card application. Which should we select?
Só what is the the best option for 1 man e commerce store (it's a brand like how Nike would be, but not similar to Nike products) (that wants to on the future to go public)
Great video! Wish I watched this video beforehand. I did not know about the deadlines for S-Corp and got hit with the late fee. Won't happen again...well not on purpose anyway LOL
Is it better to stay as a sole proprietor until you hit the 40,000 threshold or is pllc what you want to get as soon as you can for the different tax benefits out for what ever reason that influences you to get it in the first place
What is the paperwork involved in forming a LLC sole proprietor? Because my tax guy mentioned that if I work alone I file in April but if I have a partner I file in March? My tax guy is clearly mistaken about what LLC as a sole proprietor really means. So how do I explain this to a tax person? 🤔 they tend to associate LLC with s corp only.
For a Single member LLC and filling as a sole proprietor under a 1040 form is there any tax benefits on gains such as in stocks For example I create a business such as Enrique’s real estate and any gains made from the rentals are instead placed into an investing account managed by me and is owned/under my LLC..
This year in stocks has been amazing and planing on making an real estate entity just trying to find what LLC would be best for me if I wanted to open/make a savings account, investing accounts, and house properties under... also I most likely will be by myself
Hi Enrique...thanks for watching and asking your questions. I know you asked a simple question, but, there is a lot to unpack. Generally, you would form an entity (LLC) per type of activity you are doing. For example, you would not have one LLC that contains your real estate investments and stock investments. Further, if you plan on buying and holding real estate to produce rental income, that is a passive activity, and would be in a separate LLC from short term real estate investments such as flipping or rehabbing. You should consult with a professional who understands the legal and tax implications of what you are trying to accomplish. Please note that this is not tax or legal advice specific to you.
What if a person is the sole provider for a non-profit or not-for-profit? A persion who itemizes allot and gives funds, donations, and time to charities, churches, non-profit organizations, and not-for-profit organizations. Is their a sole proprietor option for non-profit organizations and/or not-for-profit organizations??
I ve a Question I live in Mesquite nv and I had a beauty salon in a different country and city and I am trying to figure out what to do I was a sole priority for 2019 and ( ein number)to September 17th 2021 I closed that shop and now I'm in Mesquite nv and opening a new salon but with the same name but I want to form a professional Llc , and do I need to apply for a new ein and LLC also fictions name again then register it too?
Hey Joanna....I'm sorry but your question has too many variables to try and answer here. Thanks for watching and I hope you find the answers to your questions. If you want, you can schedule time using the calendar links on my website.
Hi I am an optometrist in NYS, I work 1 day as a W2 and 4 days as a 1099... I did not open LLC or scorp... the self employment tax is high but so is Scorp tax... not sure what to do and what else I can write off to save money... is there any benefit of just being a LLC
@@NaviMarajCPA thank you. is that the last thing to know about the origin of those mysterious letters? is there no definite reason why "s" is s and "c" is c?
you used the word 'form' a few times in reference to an s corp. you also said it's not as legal entity so what is thing that we are 'forming' and where do we do this? sorry, I'm having trouble with this part.
Typically you would "form" or create an LLC or C Corporation with the state you are doing business in and then "elect" to have the LLC or C Corporation taxed as an S Corporation by completing paperwork with the IRS.
@@NaviMarajCPA I think I finally got it now. Some youtubers just make it sound like an 'entity'. Unless we know better it's confusing. Took me forever to grasp.
My scenario is that I have two "LLCs with S-Corp designation" and one "C-Corp with S-Corp designation". I'd like to setup a holding company, and wondering if is better to form the holding company as a "C-Corp with S-Corp designation" or "LLC with S-Corp designation"? The holding company will have 100% ownership of all subsidiaries, so I intend to file Form 8869 for each subsidiary. Looking forward to your reply or a video on this.
Navi, thank you for this content. I have a question I hope you could answer. I see a lot of UA-cam videos with the title “LLC vs Sole Proprietor” I believe I understand that you could be a sole proprietor without forming an LLC. However the IRS doesn’t recognize the LLC anyways for tax purposes, correct? So if I form an LLC for my side business in addition to my w2 full time job. I would be better off forming an LLC and filing as a Sole Proprietor, as long as by business profits don’t exceed 40k. In that case I would file my normal w2 tax return but would file an additional form that cover the business profits and then pay taxes accordingly? And a follow up question, lol, as far as LLC goes my understanding is you are separating the business from you and your personal assets. But if you have an LLC and file as a sole Proprietor could that not be an issue if the business were to get sued? It seems sort of like an oxymoron if all the business profits are going through a sole Proprietor instead of the profit staying in the business and wages being paid to the owner like in a S Corp. Maybe I’m just super confused.
Don't be too hard on yourself...sounds like you have a good handle on a lot of this stuff. Your first paragraph seems like you're on the right track with everything you mentioned. The answer is Yes and Yes. For your 2nd paragraph, I'm not a business attorney but my understanding (which is not legal or tax advice) is by forming the LLC to separate yourself from the business for legal purposes but it is disregarded by the IRS for tax purposes. Definitely consult with a competent business attorney to make sure your LLC is giving you the legal protection you think it is. You may need an operating agreement, meeting minutes, a separate business account, etc. to prop up the corporate veil that you are trying to obtain with the LLC.
Hi Sir. For example, my boss wanted to start a a small business in the US soil. (Services Business) If they decided to start as an MM LLC, is there a certain requirement of how many Non-US Incorporators needed and US Citizen Incorporators needed?
Is there any tax difference between having an LLC taxed as a C corp vs forming a C corp? If not, what is the benefit of having a C corp since LLC docs are easier to manage compared to C corp?
Do S-Corp have to pay corporate tax? If so how is it calculated? I reside in PA so corporate tax is 9.99%, so if have become an S-Corp will I be paying more in taxes?
S Corps generally do not have to pay corporate taxes....corporate taxes are generally reserved for businesses taxed as C Corporations. There are some states that have special taxes on S Corporations but I don't believe PA is one of them.
R u saying that an LLC is the business entity and that the Scorp is the filing status of the LLC. I'm about to start a small business and was told to open as an Scorp. Just wanting clarification.That for your videos.Im grateful
I have a question I accidentally apply for LLCs instead of a solo prop first time applying can they refund me those $200 so I could change it to the correct one first time trying to this month
Sure is, but it may not make financial sense in your first year. Watch this video to learn why I say that....it discussed when does an S Corp make financial sense: ua-cam.com/video/QFYFGfHOuwI/v-deo.html
Great video! I have a question, I created an LLC, I'm the only owner. I just want to protect my business from liabilities and also my spouse, in case of divorce. Do I need to file the form 8832 to be treated as a corporation for taxes purposes?
Hi Navi, if my existing sole member LLC adds a partner and becomes a partnership, will my EIN change? I was told that it wouldn't in that circumstance. Thanks!
Hello Great Video, Thanks ...I live in Pennsylvania, I drive uber, have set up an eCommerce site to allow others to sell products and make a percentage on each sale and do internet consulting, i have no corp. Can you suggest an all around best corp model to help me protect me earnings?
Hi Lincoln….I can’t answer specific questions here but as a very broad statement…forming an single member LLC and having it taxed as a sole proprietorship is a good starting point for most new businesses.
So if I’m looking to start a business myself,alone, while still working a 40 hour job. I should open a SM and do a S corp 1120s for tax? But I need to claim $40k?
Thanks so much for this video. I have some questions: Is an S-corp just a tax perspective or a legal entity as well? In other words, If I have an LLC, do I need to do any paperwork with the IRS to change my LLC to an S-corp? Or can I just keep my LLC and do taxes as an S-corp?. Also, what is the difference between a salary and a distribution? In what category do those two fall, income tax or employment tax? Thanks so much!
Hi Daisy - thank you for the feedback. An LLC is a legal entity and an S Corporation is a tax classification. You can elect to have your LLC taxed as an S Corporation by completing Form 2553, Election by a Small Business Corporation and submit it to the IRS. I would not recommend making the election until you speak to a tax professional - it may or may not be right for you. The answer to your questions about salary and distribution are quite long and probably not best for me to answer here to prevent confusion by other readers. At a high level, when you form an S Corporation you are required to pay yourself (per the IRS) a reasonable compensation. That reasonable compensation is your salary and would be paid to you as if you are an employee of your business. You will receive a paycheck, W-2, incur payroll taxes, etc. When I say "distribution" I am talking about another way to extract the profits from your business other than paying yourself a reasonable compensation. This is typically done by transferring money from your business account to your personal account.
@@NaviMarajCPA Thanks so much! This information helps greatly as I am trying to understand legal entities and tax classifications. I have an appointment with an accountant but I want to know/understand some things before meeting with him. Your reply really cleared things out for me. Once again, THANK YOU!
Can't give you specific advice here Carla....in general, it is okay to start with an LLC and have it taxed as a sole proprietorship and then if the business is profitable over and above $40k/year....start looking into having that LLC making a tax election to be taxed as an S Corporation. Hope this helps!
Navi, the IRS says c corp tax returns are typically due 4/15. Would this be a recent change? You are amazing and this video is very informative thank you
The limited relates to liability protection, not much to do with tax. I would suggest consulting with an attorney to learn more about the liability protection provided with an LLC.
A sole proprietor cannot elect to be taxed as a C Corporation. You would need to form an LLC or form a C Corporation to be taxed as a C Corporation. Consult with someone before doing this because it may not be the right thing for you.
Great video! Thank you so much! I have a question if it’s possible for you to give me some guidance, I filed my 1120S and I deducted my car expenses (gas, maintenance, insurance) but I also do delivery driver jobs for Amazon and Walmart for my 10099-NEC can I deduct mileage on schedule C of my 1040 for those jobs? I use the same car for everything my LLC. Delivery driver jobs and personal
You can file your LLC or Corporation for FREE using the links below! If you use the links, you can receive up to $100 off any additional services you may want to add:
Inc Authority: bit.ly/incauthoritycoupon
IncFile: bit.ly/incfilecoupon
Zenbusiness: bit.ly/zenbusinesscoupon
Northwest Registered Agent: bit.ly/northwestregisteredagen...
BetterLegal: bit.ly/betterlegalcoupon
Also, the due dates for when to file the various tax documents have recently changed and I misspoke in this video. The correct due dates are as follows:
Sole Proprietorship: April 15th
S Corporation: March 15th
Partnership: March 15th
C Corporation: April 15th
How can i get a code $100 off for LLC?
If I am building a business to sell it. What’s the best approach to save on taxes at the final sale of the company.
I work at a law firm that specializes in asset protection and business structuring, and you were spot on I am glad you used the different colors for the electives taxation and what is default for new business owners this is hard for people to understand. Thank you for taking the time to do this explanation video.
Hi Karen. Thanks so much for the feedback. You’re absolutely right, very hard concept for new business owners to understand.
Man you are an incredible Teacher. Easy to understand and follow. You explain this stuff really well, and even the way you use your hand as brackets to discus a particular structure is super cool. I'm trying to start my enterprises up and spent hours finding the right corporation to file and this was the vid that made it all click for me. Thanks a TON man. So humble and grateful right now.
Thanks so much for the feedback Bronson! Best of luck to you with your new venture.
Great Video Navi, super informative and I appreciate you mentioning that most people make the switch at about $40k to opt into being taxed like an S-Corp. Super helpful!!
Thank you. I've got other videos in my library breaking down the reason why $40k makes sense. Here is a link to that video if you want to check it out: ua-cam.com/video/QFYFGfHOuwI/v-deo.html.
Super helpful, Navi. Thank you. Such a great, concise explanation that I haven't found anywhere else!
Love the visual and your verbal explanation. It's so true that there is so much bad info out there. I cringe when I hear someone say their company is S-Corp because that's not a business entity and rather a tax structure. Thank you for putting this video together and sharing with the masses! Saving it and will be sharing it with others.
Thanks Joana...appreciate the feedback!
Thank you so much for not having an accent, this was extremely pleasant to watch.
Hey Navi! Thanks for posting this video. I've seen so many of people making these videos and they are so convoluted and hard to follow. My one recommendation is for you to state where you work- a lot of people may want to hire you but if they don't realize you're local or certified in their state, they may not even bother going to your website.
Thank you for taking the time to educate us.
All the best!
Tom
Brooklyn, NY
-NYC Video Podcast
Thanks for watching and for the feedback! I appreciate it.
Thank you SOOO much for this video!! This is super helpful. I am starting a business with a partner that lives in another state and wanted to make sure we set everything up correctly. I have spent hours researching this and this video was THE MOST HELPFUL in breaking down the different types of entities and where to start out. I feel like I finally have some clarification. Thank you again!
This was the single best explainer video of the different Corp types I needed to learn about. Thank you!
Thank you. A team discussing with me my Financial Reporting course.
Thank you for the visuals! It's so nice to have an idea of all of the options to narrow down what works best for each small biz owner.
I appreciate you mention the SM LLC, no others yet have.
Excellent diagram and explanation. I haven't seen anything explained this well. These UA-cam attorneys just throw out terms like "schedule c" and "1065" like your supposed to know without ever explaining what's what.
@Braden Souder Thank you for the feedback! Glad that you found it helpful and informative.
Sir, you explain in a way that an average person like me can understand. Thank you.😇😇😇
I cannot overstate how helpful this video was. Thank you!
Thanks so much Sheena! Really appreciate the feedback.
Great video. My wife and I are nurses. We work as self employed 1099. I could open a single member LLC and do S election. And they both work in the same LLC as an S corp. And that the 1099s are reported from both of them through the S Corp. Then the S corp generates w2 for each one and the dividends pass through K1 to the owner. Or each would have to open their own LLC and make S election. thanks
This was a great video, straight to the point. Makes me a little more secure about getting my llc started thank you.
Thanks for the feedback Alejandra! Glad it was helpful. Don’t forget to check the links in the description to form your LLC for free if you’re ready.
I didn’t even know about PLLC.. this video was so helpful and necessary
It's kinda important to mention WHERE you are and which jurisdictions oversee that!
Excellent video! Short, to the point, with easy to understand illustration. Thank you!
Thanks. I've been meaning to change to S-Corp from C-corp
You’re welcome Ben. Consult with your tax professional to make sure it is the correct thing to do based on your specific situation.
Thank you so much! I have been trying to decide how to structure my business for a very long time. You helped me finally make the decision.
You’re welcome! Glad you found the video helpful.
Navi one of the missed information that most all of us don't received is that we have to pay $ annually to our Estate if we decide to file and articles or be treated as S Corp if we want to save money on taxes.
This is excellent - coming from a tax attorney / CPA! Looking back through your videos to see how you got into doing this!
I've been researching information all day. your video was straightforward and very helpful. Thank you.
You’re welcome Whitney…glad it was helpful!
Thank you so much this video was exactly what I needed!!!
Thanks Cru - glad you found it helpful. Please share with others if you think it will help.
Keep up the videos boss, the community needs more information from qualified individuals!
Will do!
Big strategic person-person business development is the key to success in today's business world.
Thank you so much. This was very helpful! Heading to Google to find a local CPA now!
Thank you! Your videos are most informative and very easy to listen to. The best!
Thank you for the feedback John - means a lot!
Mr Navi this was great information as a novice beginner
Excellent video! Thanks for sharing! I have shared with others studying for the CPA.
Just subscribed to your channel. That was an awesome vid. Simple, and straight to the point! Thanks
Thanks for watching and subscribing Edgar! Glad you learned and found it helpful.
Really good video. Cleared some things up in my head since I am a noob.
Navi I appreciate you for making this video! I feel like I have a much better understanding now.
That’s great to hear Neal! Thanks for watching!
Very helpful man! Thanks! Even wrote down all these notes since I am going to have to start doing taxes for my business and side business. Once again thank you very much for this!
Thanks for the feedback. You're not the only one who has told me they take notes while watching!
Amazing information. Easy to follow and understand. Great presentation.
Thanks for the feedback @Bd Manus!
Thank you! it was so hard to find this information. You got right to the point
Thank you so much, I'm currently researching the best option for a brand new small business.
Great - glad the videos are helpful!
3 questions: Does the owner of a C-corp have to take a salary? Example: The owner of one major company said he didn't pay personal taxes because he didn't take a salary. Can you change an llc to a corp as it grows? Reason: if I formed a company now it might be a couple years before it could afford a "reasonable salary" for me. Does a C-corp have to offer its shares for sale or can it remain private, in the hands of 1 or 2 owners? The reason for this is that there are distinct advantages of the C-corp that are beyond the scope of taxes and liability protection.
Short and to the point - much appreciated!
Thanks Rinaldo!
Thanks for the easy explanation. Subscribed ! 👍
I just started my LLC. Thanks for the info.
You're welcome Daniel...best of luck to you and your new business!
@@NaviMarajCPA to
Daniel, why?
Thanks for explaining. The 40k net profit just not making sence to use a S crop. You are created more work for your accountant to charge you fees. ❤
Thank you so much for this valuable information! Be blessed!
when entering vendor w9's into an ERP acctng software for these fed tax classifications, are S Corp's and partnerships; to be treated as exempt? (for when the 1099's get produced year end)? And if so, are these the only 2?
I have a separate video that discusses if a 1099 needs to be issued or not. Do a search for that video and it may answer your questions - it's not a straightforward answer or else I would provide the answer here.
Thank you so much for this information. My mom wants me to register her cleaning business and I’m learning all this new stuff. I’m going for LLC 😅
You're welcome!
What if I have a company in India and I wanna setup a subsidiary in US so what steps should I be taking? I don't know much about SCORP, CORP, LLC....
In India we have structures like PVT. LTD, LLP, sole proprietorship, partnership, HUF, etc.
Hey Manas...sorry, I'm not an expert with this type of structure so I would defer to someone else that is familiar with setting up entities in the US for non-residents.
One correction that needs to be made is that a C-Corporation’s tax return due date is 4/15 just like 1040 due date. Only partnership and S-Corp tax return due date is 3/15.
Thanks! I’m not able to edit the video but I did note that error in the description and pinned comments.
I'm confused. It seems an S corp simply passes the tax burden on to the single member owner. Could you clarify how the owner (now an employee of the S corp) will get reduced taxes.
Thank you so much for making this video. It is very helpful.
You’re welcome Kushagra!
Great video, thank you very much. Could you please write a work about 5472 form. And maybe about SM LLC owned by None resident. Thanks again
We just started a single member LLC. We would like to open a business credit card but we have to choose between corporation, partnership, and sole proprietorship for the company structure on the credit card application. Which should we select?
Só what is the the best option for 1 man e commerce store (it's a brand like how Nike would be, but not similar to Nike products) (that wants to on the future to go public)
Very useful video! I'll recommend it to my colleagues
Thanks for the feedback Anastasiya. Hope your colleagues find it helpful as well.
Great video! Wish I watched this video beforehand. I did not know about the deadlines for S-Corp and got hit with the late fee. Won't happen again...well not on purpose anyway LOL
Hi Doug G. Thanks for the feedback and for letting the community know about your experience. Hope others will learn by your willingness to share.
Is it better to stay as a sole proprietor until you hit the 40,000 threshold or is pllc what you want to get as soon as you can for the different tax benefits out for what ever reason that influences you to get it in the first place
Thank you, good Sir!
Wonderful video and please make more!
Thank you baba black for the feedback!
What is the paperwork involved in forming a LLC sole proprietor? Because my tax guy mentioned that if I work alone I file in April but if I have a partner I file in March? My tax guy is clearly mistaken about what LLC as a sole proprietor really means. So how do I explain this to a tax person? 🤔 they tend to associate LLC with s corp only.
For a Single member LLC and filling as a sole proprietor under a 1040 form is there any tax benefits on gains such as in stocks
For example I create a business such as Enrique’s real estate and any gains made from the rentals are instead placed into an investing account managed by me and is owned/under my LLC..
This year in stocks has been amazing and planing on making an real estate entity just trying to find what LLC would be best for me if I wanted to open/make a savings account, investing accounts, and house properties under... also I most likely will be by myself
Hi Enrique...thanks for watching and asking your questions. I know you asked a simple question, but, there is a lot to unpack. Generally, you would form an entity (LLC) per type of activity you are doing. For example, you would not have one LLC that contains your real estate investments and stock investments. Further, if you plan on buying and holding real estate to produce rental income, that is a passive activity, and would be in a separate LLC from short term real estate investments such as flipping or rehabbing. You should consult with a professional who understands the legal and tax implications of what you are trying to accomplish. Please note that this is not tax or legal advice specific to you.
What if a person is the sole provider for a non-profit or not-for-profit? A persion who itemizes allot and gives funds, donations, and time to charities, churches, non-profit organizations, and not-for-profit organizations. Is their a sole proprietor option for non-profit organizations and/or not-for-profit organizations??
You are so clear thank you so much. You got a new subscriber 😊🤓👍🏾
Appreciate the feedback Cocoa...thanks for subscribing!
I ve a Question I live in Mesquite nv and I had a beauty salon in a different country and city and I am trying to figure out what to do I was a sole priority for 2019 and ( ein number)to September 17th 2021 I closed that shop and now I'm in Mesquite nv and opening a new salon but with the same name but I want to form a professional Llc , and do I need to apply for a new ein and LLC also fictions name again then register it too?
Hey Joanna....I'm sorry but your question has too many variables to try and answer here. Thanks for watching and I hope you find the answers to your questions. If you want, you can schedule time using the calendar links on my website.
Really Helpful.. Keep Up The Gud Work Bruh✅❤
Thank you - appreciate your feedback and support!
Hi
I am an optometrist in NYS, I work 1 day as a W2 and 4 days as a 1099... I did not open LLC or scorp... the self employment tax is high but so is Scorp tax... not sure what to do and what else I can write off to save money... is there any benefit of just being a LLC
hi. nice discussion. all I wanna ask is what does "s" and "c" corporation stands for?
Subchapter S and C of the Internal Revenue Code.
@@NaviMarajCPA thank you. is that the last thing to know about the origin of those mysterious letters? is there no definite reason why "s" is s and "c" is c?
you used the word 'form' a few times in reference to an s corp. you also said it's not as legal entity so what is thing that we are 'forming' and where do we do this? sorry, I'm having trouble with this part.
Typically you would "form" or create an LLC or C Corporation with the state you are doing business in and then "elect" to have the LLC or C Corporation taxed as an S Corporation by completing paperwork with the IRS.
@@NaviMarajCPA I think I finally got it now. Some youtubers just make it sound like an 'entity'. Unless we know better it's confusing. Took me forever to grasp.
My scenario is that I have two "LLCs with S-Corp designation" and one "C-Corp with S-Corp designation". I'd like to setup a holding company, and wondering if is better to form the holding company as a "C-Corp with S-Corp designation" or "LLC with S-Corp designation"? The holding company will have 100% ownership of all subsidiaries, so I intend to file Form 8869 for each subsidiary. Looking forward to your reply or a video on this.
Navi, thank you for this content. I have a question I hope you could answer. I see a lot of UA-cam videos with the title “LLC vs Sole Proprietor” I believe I understand that you could be a sole proprietor without forming an LLC. However the IRS doesn’t recognize the LLC anyways for tax purposes, correct? So if I form an LLC for my side business in addition to my w2 full time job. I would be better off forming an LLC and filing as a Sole Proprietor, as long as by business profits don’t exceed 40k. In that case I would file my normal w2 tax return but would file an additional form that cover the business profits and then pay taxes accordingly?
And a follow up question, lol, as far as LLC goes my understanding is you are separating the business from you and your personal assets. But if you have an LLC and file as a sole Proprietor could that not be an issue if the business were to get sued? It seems sort of like an oxymoron if all the business profits are going through a sole Proprietor instead of the profit staying in the business and wages being paid to the owner like in a S Corp. Maybe I’m just super confused.
Don't be too hard on yourself...sounds like you have a good handle on a lot of this stuff. Your first paragraph seems like you're on the right track with everything you mentioned. The answer is Yes and Yes.
For your 2nd paragraph, I'm not a business attorney but my understanding (which is not legal or tax advice) is by forming the LLC to separate yourself from the business for legal purposes but it is disregarded by the IRS for tax purposes. Definitely consult with a competent business attorney to make sure your LLC is giving you the legal protection you think it is. You may need an operating agreement, meeting minutes, a separate business account, etc. to prop up the corporate veil that you are trying to obtain with the LLC.
Hi Sir. For example, my boss wanted to start a a small business in the US soil. (Services Business) If they decided to start as an MM LLC, is there a certain requirement of how many Non-US Incorporators needed and US Citizen Incorporators needed?
Is there any tax difference between having an LLC taxed as a C corp vs forming a C corp? If not, what is the benefit of having a C corp since LLC docs are easier to manage compared to C corp?
Thank you, you've saved my CPA from having to answer many of the questions answered in this video.
You’re welcome…glad you got some of your questions answered.
Do S-Corp have to pay corporate tax? If so how is it calculated? I reside in PA so corporate tax is 9.99%, so if have become an S-Corp will I be paying more in taxes?
S Corps generally do not have to pay corporate taxes....corporate taxes are generally reserved for businesses taxed as C Corporations. There are some states that have special taxes on S Corporations but I don't believe PA is one of them.
What if I don't have any income revenue to show? Do I still file a tax return even there's a zero income? Thanks.
Watch this video...it covers when a tax return is required: ua-cam.com/video/rvqN-PGNiG8/v-deo.html
Very well put together. Thank you.
You’re welcome…let me know if there is anything else you need help understanding.
R u saying that an LLC is the business entity and that the Scorp is the filing status of the LLC. I'm about to start a small business and was told to open as an Scorp. Just wanting clarification.That for your videos.Im grateful
Yes Misses Miller that is exactly what I’m saying. Legal entity types and tax classifications are two separate things.
I have a question I accidentally apply for LLCs instead of a solo prop first time applying can they refund me those $200 so I could change it to the correct one first time trying to this month
I was heard that C Corp charge tax for 30% in 5 years, but after 5 years as the owner you don't to pay tax isn't it?
Is it okay to create a SM LLC and be taxed as a SCorp from the Jump?
Sure is, but it may not make financial sense in your first year. Watch this video to learn why I say that....it discussed when does an S Corp make financial sense: ua-cam.com/video/QFYFGfHOuwI/v-deo.html
Great video! I have a question, I created an LLC, I'm the only owner. I just want to protect my business from liabilities and also my spouse, in case of divorce. Do I need to file the form 8832 to be treated as a corporation for taxes purposes?
Nice content. I found this very helpful.
Hi Navi, if my existing sole member LLC adds a partner and becomes a partnership, will my EIN change? I was told that it wouldn't in that circumstance. Thanks!
If im a single member sole proprietorship example makeup artist can i file as s corp as well if im the only owner
Can you have multiple businesses in an LLC? As a Realtor and a Landlord would it benefit to have a PLLC instead?
Great video
Thank you for the feedback...glad you found it helpful.
Hello
Great Video, Thanks ...I live in Pennsylvania, I drive uber, have set up an eCommerce site to allow others to sell products and make a percentage on each sale and do internet consulting, i have no corp.
Can you suggest an all around best corp model to help me protect me earnings?
This is the most helpful video about this topic. Thank you so much!
Thank you Angelica for the feedback! Glad you found it helpful.
If you start your company as an LLC, is there an option to switch to a PLLC later on once state certifications are obtained?
Great question. I think it would come down to the State. Some states allow you to do a change like this, others do not.
Would a Sole prop be better for someone starting a online clothing store?
Hi Lincoln….I can’t answer specific questions here but as a very broad statement…forming an single member LLC and having it taxed as a sole proprietorship is a good starting point for most new businesses.
So if I’m looking to start a business myself,alone, while still working a 40 hour job. I should open a SM and do a S corp 1120s for tax? But I need to claim $40k?
Thanks so much for this video. I have some questions: Is an S-corp just a tax perspective or a legal entity as well? In other words, If I have an LLC, do I need to do any paperwork with the IRS to change my LLC to an S-corp? Or can I just keep my LLC and do taxes as an S-corp?. Also, what is the difference between a salary and a distribution? In what category do those two fall, income tax or employment tax? Thanks so much!
Hi Daisy - thank you for the feedback.
An LLC is a legal entity and an S Corporation is a tax classification. You can elect to have your LLC taxed as an S Corporation by completing Form 2553, Election by a Small Business Corporation and submit it to the IRS. I would not recommend making the election until you speak to a tax professional - it may or may not be right for you.
The answer to your questions about salary and distribution are quite long and probably not best for me to answer here to prevent confusion by other readers. At a high level, when you form an S Corporation you are required to pay yourself (per the IRS) a reasonable compensation. That reasonable compensation is your salary and would be paid to you as if you are an employee of your business. You will receive a paycheck, W-2, incur payroll taxes, etc.
When I say "distribution" I am talking about another way to extract the profits from your business other than paying yourself a reasonable compensation. This is typically done by transferring money from your business account to your personal account.
@@NaviMarajCPA Thanks so much! This information helps greatly as I am trying to understand legal entities and tax classifications. I have an appointment with an accountant but I want to know/understand some things before meeting with him. Your reply really cleared things out for me. Once again, THANK YOU!
I’m still a little confused, I’m starting a business and I would resell some art supplies and stationery items which one should I apply for ?
Can't give you specific advice here Carla....in general, it is okay to start with an LLC and have it taxed as a sole proprietorship and then if the business is profitable over and above $40k/year....start looking into having that LLC making a tax election to be taxed as an S Corporation. Hope this helps!
What company is best for contact center business for a non resident?
Thank you for watching and for your question but unfortunately I can't give specific advice via the UA-cam comment section.
Navi, the IRS says c corp tax returns are typically due 4/15. Would this be a recent change? You are amazing and this video is very informative thank you
What does the “limited” in LLC actually refer to? What are the limits?
The limited relates to liability protection, not much to do with tax. I would suggest consulting with an attorney to learn more about the liability protection provided with an LLC.
Hello . Can I switch sole proprietor trucking company to C corporation
A sole proprietor cannot elect to be taxed as a C Corporation. You would need to form an LLC or form a C Corporation to be taxed as a C Corporation. Consult with someone before doing this because it may not be the right thing for you.
@@NaviMarajCPA thanks brother
Great video! Thank you so much! I have a question if it’s possible for you to give me some guidance, I filed my 1120S and I deducted my car expenses (gas, maintenance, insurance) but I also do delivery driver jobs for Amazon and Walmart for my 10099-NEC can I deduct mileage on schedule C of my 1040 for those jobs? I use the same car for everything my LLC. Delivery driver jobs and personal
Thank you so much! This clarified so much for me!
You’re welcome…glad you found it helpful!
Navi, thanks for the video.
Can a sole proprietor file taxes as married filing jointly? or should it be married filing separately?