I love the content. The reason I don't LLC is because as a sole proprietor, I want to see what is going to happen. Then and only then will I explore an LLC. Don't want to spend more than I have to. "Measure twice cut once."
Bad C corp tax example. If you pay yourself W2 wages, those are expenses for the C corp, so they reduce the C corp income. The double taxation for C corps is generally via dividends which, if qualified, may be taxed on your personal income at a lower rate than "active" income. If all of your S corp income is "active", there's very little net difference between the C corp and S corp taxation structures. The S corp shines for non-active (captial gain) income which can be taxed (only once) at the long term capital gains rate (if these non-active profits are taken out at least a year after the capital is added to the LLC).
You were doing good up until the example of double taxation. A c corporation would be able to deduct the wages it pays to its owner, in most cases, and therefore the C Corp would only pay taxes on $60,000. If you had used the dividend as an example, then you would have been spot on.
What do you mean a c corp would only pay taxes up to 60,000? So what the c corp pays you (the owner) pays taxes only up to 60,000? And then all money paid to you beyond that is not taxed/ no taxes are taken from it?
Yeah Doc, I’m lost on that too. Thought the owner got 50,000 out of 100,000. I think money taken out prior to taxes would help except when paying employment tax of up to 40% and C Corp needed to pay health and welfare?
I got an L.L.C last year because my oldest wanted to work. We filed taxes on the L.L.C this time . What is my part? I did personal taxes but do I do business taxes now since she filed ?
Banks in Virginia have introduced a Minority Business Fund program. To qualify, start-ups must get Minority Business Enterprise Certification. Can a LLC be registered and MBE certification obtained at the same time from the Virginia Department of Small Business and Supplier Diversity ?
I don't own a C corp. business. BUT, doesn't that business C corp. get to deduct payroll expenses as a regular business expense (legal business deduction) in determining net profit? Please someone answer that question...thanks! In my S-corp. business I do deduct all W-2 expenses including the matching social security expenses, and SUTA and FUTA tax as a regular business deduction. Any profit on the S corp is reported on a K-1, then gets reported on the Schedule 5 for Supplemental income which in turn is reported on Form1040. I'm never double taxes an an S corp owner.
Very informative I’m just starting my home business and I’m on a fixed income at this point and have purchased some equipment and products to run the business but it’s a little challenging finding the help I need but what’s the best entity I should go with LLC or S-Corporation I also have my EIN number and my Business Authorization Certificate of Registration
When I first started my business it was a sole proprietorship. I applied for an EIN number to pay sale taxes. I just switched over to an LLC. I applied for a new EIN number for the same company. How do I cancel or get rid of the old EIN number?
You don't. The IRS cannot cancel your EIN. Once an EIN has been assigned to a business entity, it becomes the permanent Federal taxpayer identification number for that entity. Regardless of whether the EIN is ever used to file Federal tax returns, the EIN is never reused or reassigned to another business entity. The EIN will still belong to the business entity and can be used at a later date, should the need arise. If you receive an EIN but later determine you do not need the number (the new business never started up, for example), the IRS can close your business account.
Tax write-offs aren't an advantage (of an LLC)---you can do all the described organization as a sole proprieter (SP). Ditto Pass-through Tax Deductions. And SP's are the easiest to set up---just file a Schedule C. Really, the two main advantages of an LLC are (1) it's harder for people to sue you, and (2) you may be able to convert income to long-term capital gains (if business profits exceed the reasonable wage you need to pay yourself for active work).
In the pass through vs non pass through example why wouldn’t the owners w2 pay be an expense for the business, and therefore not taxed at the business entity level?
Wages are deducted on a C Corp. Not sure why he brought that up since it moves taxes from the 1120 to 1040. I expected him to bring up dividends since that creates double taxation.
I created my LLC in July 2021as a single member. I wasn't aware that I had to file an ECE with the IRS and it had to be done within 75 days of formation until today! I was told that i don't want my LLC to be automatically classified as a Disregarded Entity. The problem is I'm not sure what classification I should elect. I would like to pay as little self employment tax as possible.
In your calculation for C corporation i wonder if i understands correctly. If your company make 100.000$ and pay you 40.000. Should your company be taxed on 60.000$ ? Instead of 100.000k ? So even you are taxed twice but your icome are devised into 2 smaller tax bracked. Would it be a benefit over pass-though tax ?
Very little “tax” advantages of having an LLC over a partnership, which has been around for years. The same partnership rules are used to tax both. “Legal” protection is the real only benefit of an LLC over a partnership!
@@Lululal1234 Go learn what? That you are overselling the TAX benefits of an LLC? I’ve been in tax practice longer than you’ve been alive. You’re comparing LLCs with C corps. It’s extremely rare for any small business to go C these days even with the rate differential so that’s an invalid comparison. Everything you present as a “tax benefit” can be accomplished through a sole proprietorship, a partnership or an S-corp (the latter two are pass through entities btw). I love LLCs for the ease of setting up and the liability protection, but Mark Skipper was right. If you look a little further into this you’ll find that you can get the same tax benefits a number of ways. You go learn.🤣🤣🤣
@@jordanpersonal1 thats the issue "tax practices" or tax agent" your probably a shit one 🤣 I've been in business for 20y plus, I already know. What you have said is irrelevant to me I'm not in the U.S I'm in Australia. privately held C Corp is called "proprietary limited" in Australia. Partnerships is rubbish and so is sole traders. When I say go learn, learn your tax code in your country. There's more to it then tax benefits buddy, like I say learn and don't just read you sheep, put your so called practice in to practice 🤣 Unfortunately you'll only ever learn, if you get into business. Funny how I know u.s tax and aus tax.
C corporation have a disadvantage with double taxation. I would not say LLC have an advantage if they are the Same as any other type when it comes to taxes. Setting up llc must be a product u selling bc ur ignoring llc is the same as any other non corporate business
Hi, can you set up a tax plan for us? We just registered our business in Delaware and need this ASAP. We will be working overseas and not within the US. Currently waiting for the Apostille document. Need your assistance. A bit confused when it comes to the taxes🙏🏼. How are we going to do so if our services will be overseas?
That's exactly what I was going to say lol. There is a difference tho. You can put more purchases under the company, LLC, and have better record keeping that way and they're for be a little more aggressive in your write offs.
Very affirmative thank you deeply I appreciate your efforts to share this. Can I establish LLC with my SSN instead of tax id number for LLC.. What's the benefit and disbenefit of doing so please..
great video, jus wonderin if I could get an opinion tho.. I got a newly started clothing brand and I was wondering how important is it for us to register the llc?
Great video! Question…I am one of 3 owners (equal shares) of a small incorporated business. Our corporation has a brokerage account that has done very well. We’ve not paid ourselves any of the profits because we’ll have to pay corporate taxes, then personal. Is there a way to transfer the brokerage account to an LLC?
So if I have my own business but no LLC I can only write off 20% of my income? Im planning on getting an LLC this week. If the answer is yes, if I get one now will that let me write off more for 2020? Because my expenses did exceed 20% for 2020. Also, great video thanks!
Hi Gavin, the pass-through deduction applies to pass-through entities. This includes sole proprietors, LLCs, partnerships, and S-Corps. But there are other rules to using the deduction so you may want to research this a little more.
@@GavinB211 You get to deduct your expenses whether you have an LLC or not. No matter how much the expenses are. You also get the 20% deduction (Section 199A if you want to google it) whether you have an LLC or not.
Request for you to create video vlog subject topic on Government pay people international travel to vacation with their business , Spoken by Shantel maxwell not tangie bass this is a shared channel with my mother
![14 Biggest Tax Write Offs for Small Businesses! [What the Top 1% Write-Off]](http://i.ytimg.com/vi/5YggWhLeckM/mqdefault.jpg)
You guys are the best, simplified, fast, and you include time stamps in the video. very educational and efficient. Bravo!
We're on a mission to be the best accounting/business channel on UA-cam :)
@@LYFEAccounting What incentives would pay me better. by an electric car or by putting panels alone in the house?
I'm a CPA. I'm just gonna play this video for my clients that are starting up businesses. You explained it MUCH more fluidly than me, lol...
I share that sentiment Joe. They still won’t get it though 😂
I’m not a CPA, but I do own a business support service. My clients watch all these videos.
Are you looking for clients? I am looking for a CPA. Reply with your info.
If I want to dissolve my LLC, do I have to still pay the Annual Report? It's getting close to the due date.
As a fellow accountant, this is a simple to understand and clear explanation of LLCs. Keep up the good work!
I love the content. The reason I don't LLC is because as a sole proprietor, I want to see what is going to happen. Then and only then will I explore an LLC. Don't want to spend more than I have to. "Measure twice cut once."
Same here
Bad C corp tax example. If you pay yourself W2 wages, those are expenses for the C corp, so they reduce the C corp income. The double taxation for C corps is generally via dividends which, if qualified, may be taxed on your personal income at a lower rate than "active" income. If all of your S corp income is "active", there's very little net difference between the C corp and S corp taxation structures. The S corp shines for non-active (captial gain) income which can be taxed (only once) at the long term capital gains rate (if these non-active profits are taken out at least a year after the capital is added to the LLC).
Yeah I am appalled that he missed that. As a CPA....
@@alxghyu1844 Try explaining the topic in a short video like he did. Let’s see how you do!!
@@ellesf1606 lol no thanks that's not my job
@@alxghyu1844 Jealousy shows to people reading. It shows!!
Great concise video. Covered a myriad of topics pertaining to an LLC, some I didn’t even think about. Very helpful. Keep up the great vids.
Thanks ☺️ we’re just getting started!
Thank you! Your video was easy to understand and follow! I truly appreciate you taking the time to make this video!
Good information. Something to think about though, the music sounds like a heartrate machine in a hospital. I had to turn it off, making me nuts.
You do a great job in making mundane tax laws exciting to learn about. Thank you
I appreciate that!
Hey, great video! I did not know about the 20% deduction law.... I am gonna have a word with my accountant...
You're not alone. We're about to release a video about that next week, please share it with your accountant
GM excellent video this CPA did a great job.
Hey, thanks!
Thank you for making this subject understandable!
Excellent Experience Awesome Awakening Thank You I Subscribed
Good stuff! Very informative, thanks.
Awesome explanation. Clear voice and easy to understand.
Thanks much
Very well explained video. Thank you!
Great video, My dude from GSU doing great things!
Go lopes lol
Great info, straight to the point, very professional
Thanks for sharing this good info!
Thanks for watching
You can be a great teacher :). You made things easy to understand. Thank you,
Gracias
I clicked like video. LLC are legal tax loops holes, there I fixed it :)
This video was so well put together and informative.
You were doing good up until the example of double taxation. A c corporation would be able to deduct the wages it pays to its owner, in most cases, and therefore the C Corp would only pay taxes on $60,000. If you had used the dividend as an example, then you would have been spot on.
What do you mean a c corp would only pay taxes up to 60,000? So what the c corp pays you (the owner) pays taxes only up to 60,000? And then all money paid to you beyond that is not taxed/ no taxes are taken from it?
Yeah Doc, I’m lost on that too. Thought the owner got 50,000 out of 100,000. I think money taken out prior to taxes would help except when paying employment tax of up to 40% and C Corp needed to pay health and welfare?
This is an amazing way to explain this.
Thank you for posting a very easy way for all of us to understand. BTW, I subscribed.
Welcome aboard and thanks for the support.
Definitely helpful! Time to hit the books!
Thank you!
You're welcome!
I got an L.L.C last year because my oldest wanted to work. We filed taxes on the L.L.C this time . What is my part? I did personal taxes but do I do business taxes now since she filed ?
Banks in Virginia have introduced a Minority Business Fund program. To qualify, start-ups must get Minority Business Enterprise Certification. Can a LLC be registered and MBE certification obtained at the same time from the Virginia Department of Small Business and Supplier Diversity ?
I don't own a C corp. business. BUT, doesn't that business C corp. get to deduct payroll expenses as a regular business expense (legal business deduction) in determining net profit? Please someone answer that question...thanks! In my S-corp. business I do deduct all W-2 expenses including the matching social security expenses, and SUTA and FUTA tax as a regular business deduction. Any profit on the S corp is reported on a K-1, then gets reported on the Schedule 5 for Supplemental income which in turn is reported on Form1040. I'm never double taxes an an S corp owner.
Awesome video
Great vid! Very easy to follow and great explanations!
Um, the corporation gets to deduct the wages it pays you before it pays Corp tax. You're thinking of dividends.
So helpful. Thanks
Perfectly explained!
The best explanation!!
Very informative I’m just starting my home business and I’m on a fixed income at this point and have purchased some equipment and products to run the business but it’s a little challenging finding the help I need but what’s the best entity I should go with LLC or S-Corporation I also have my EIN number and my Business Authorization Certificate of Registration
Will you have any employees?
S Corp is a tax status, not a business structure. LLC and C Corp are business structures.
Amazing Content! Thanks for sharing!
Our pleasure!
Love from India 🇮🇳
Wonderful video thank you!
When I first started my business it was a sole proprietorship. I applied for an EIN number to pay sale taxes. I just switched over to an LLC. I applied for a new EIN number for the same company. How do I cancel or get rid of the old EIN number?
You don't.
The IRS cannot cancel your EIN. Once an EIN has been assigned to a business entity, it becomes the permanent Federal taxpayer identification number for that entity. Regardless of whether the EIN is ever used to file Federal tax returns, the EIN is never reused or reassigned to another business entity. The EIN will still belong to the business entity and can be used at a later date, should the need arise.
If you receive an EIN but later determine you do not need the number (the new business never started up, for example), the IRS can close your business account.
Thank you very informative
I'm really happy to view this tutorial❤️ , I love it on here and thanks to everyone on telegram
Also thanks to@slimrado
Is there any chance I could know which states to move to form an LLC (for affordable taxation) ?
Great video tho 👊🏻
Montana
Don't need to move to generate an LLC. Just go thru a Registered Agent in that state.
A great entity for people just starting out
Thank you, concise info!
Glad it was helpful!
Outstanding video well executed covered all of the basics 👌in an easy to understand fashion and covered the tax implications to a T!
Thank you so much 🙂
Tax write-offs aren't an advantage (of an LLC)---you can do all the described organization as a sole proprieter (SP). Ditto Pass-through Tax Deductions. And SP's are the easiest to set up---just file a Schedule C. Really, the two main advantages of an LLC are (1) it's harder for people to sue you, and (2) you may be able to convert income to long-term capital gains (if business profits exceed the reasonable wage you need to pay yourself for active work).
Convert income, from the LLC? This sounds interesting. I'll need to research this.
He is talking to those who benefits from an LLC!!!
Awesome video !!
Glad you enjoyed it
Good info! Just started my business but I’m a little misinformed on the tax aspects of it all
Keep watching our videos and you will be in good shape. We appreciate the support.
Question, i just created an llc for a new biz. Should i file an 8832?
In the pass through vs non pass through example why wouldn’t the owners w2 pay be an expense for the business, and therefore not taxed at the business entity level?
Wages are deducted on a C Corp. Not sure why he brought that up since it moves taxes from the 1120 to 1040. I expected him to bring up dividends since that creates double taxation.
Great information and very informative
Glad you think so!
It would be a good idea to define what an LLC is before saying much , otherwise its a nice video👍
This is a short video. It is designed for an audience that knows what an LLC is. You have to educate yourself too.
Do you recommend for a new virtual assistant a llc or sole proprietor?
Thanks For the information
Thank you for the info!
logically inconsistent information, but technically factual
Awesome stuff 🖖🏾🤓
I created my LLC in July 2021as a single member. I wasn't aware that I had to file an ECE with the IRS and it had to be done within 75 days of formation until today! I was told that i don't want my LLC to be automatically classified as a Disregarded Entity. The problem is I'm not sure what classification I should elect. I would like to pay as little self employment tax as possible.
Did you ever figure this out? I’m in the same situation
@@luvchyld86 why can’t you write to mr James for a help he will help you with all you need you can invest with him for a better profit
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@@luvchyld86I'm going to classify as a S Corp
The LLC doesn't run business in the US, and the sole member is not resident. Does have to pay taxes in US? Thanks
Pass through taxation benefits are at the state level or the federal level??
Great info!! Subscribing !!
Thanks for the sub!
In your calculation for C corporation i wonder if i understands correctly. If your company make 100.000$ and pay you 40.000. Should your company be taxed on 60.000$ ? Instead of 100.000k ? So even you are taxed twice but your icome are devised into 2 smaller tax bracked. Would it be a benefit over pass-though tax ?
so your w2 income is not a deduction to your c corp?????
Good info thanks 👍
Very little “tax” advantages of having an LLC over a partnership, which has been around for years. The same partnership rules are used to tax both. “Legal” protection is the real only benefit of an LLC over a partnership!
Yes an llc does provide protection. However you need to learn alot more lol because you don't understand how to use it.
@@Lululal1234 Well, since Mark Skipper is correct in his comments perhaps you could enlighten others as to what he is missing.
@@jordanpersonal1 go learn.
@@Lululal1234 Go learn what? That you are overselling the TAX benefits of an LLC? I’ve been in tax practice longer than you’ve been alive. You’re comparing LLCs with C corps. It’s extremely rare for any small business to go C these days even with the rate differential so that’s an invalid comparison. Everything you present as a “tax benefit” can be accomplished through a sole proprietorship, a partnership or an S-corp (the latter two are pass through entities btw). I love LLCs for the ease of setting up and the liability protection, but Mark Skipper was right. If you look a little further into this you’ll find that you can get the same tax benefits a number of ways. You go learn.🤣🤣🤣
@@jordanpersonal1 thats the issue "tax practices" or tax agent" your probably a shit one 🤣 I've been in business for 20y plus, I already know.
What you have said is irrelevant to me I'm not in the U.S I'm in Australia. privately held C Corp is called "proprietary limited" in Australia. Partnerships is rubbish and so is sole traders.
When I say go learn, learn your tax code in your country.
There's more to it then tax benefits buddy, like I say learn and don't just read you sheep, put your so called practice in to practice 🤣
Unfortunately you'll only ever learn, if you get into business.
Funny how I know u.s tax and aus tax.
Thanks, I'm kinda a dumbass who wasn't paying attention in class ☠️, but I'll definetly pass now
Can you explain pass through tax deductions better please. And what qualifies
Excellent video , question can an lllc be created and work with crypto?
It can!
Where to start llc in California? I got varies offer from 800 usd to 3000 usd to set up.
It doesn’t cost that much to get registered. Usually $25 to 125 depending on the state
@@NextLevelMeNow California is $800.
@@ItsDan123 thank you so much
Thanks for the vid
You bet
Sincere Meadows
Interesting example!
Glad you thought so
Great information
Thank you, Steven!
Excellent info as always Sherman, thanks !! My office is at home, and I drink cofre every morning: could I write off a capuchino machine ?
Thanks for watching, Ram. If it is ordinary and necessary for the business it can be written off.
@@LYFEAccounting thank you !! Have a great weekend
GREAT video 🔥🔥
Thanks! 😃
Good info
Glad you think so!
C corporation have a disadvantage with double taxation. I would not say LLC have an advantage if they are the Same as any other type when it comes to taxes. Setting up llc must be a product u selling bc ur ignoring llc is the same as any other non corporate business
If the LLC owner deducts x amount money each month. Do they have to record the withdrawals on the Schedule C form or SE form?
Hi, can you set up a tax plan for us? We just registered our business in Delaware and need this ASAP. We will be working overseas and not within the US. Currently waiting for the Apostille document. Need your assistance. A bit confused when it comes to the taxes🙏🏼.
How are we going to do so if our services will be overseas?
We will be helping people with tax planning soon! Please subscribe and turn on notifications for when we launch
@@LYFEAccounting already did!
Is there a video to the Passive business owner LLC?
That's exactly what I was going to say lol. There is a difference tho. You can put more purchases under the company, LLC, and have better record keeping that way and they're for be a little more aggressive in your write offs.
No
Thank you.
Well done video.
Thanks for the visit, just curious, which part did you find most valuable?
How does an LLC affect my filing taxes when filing with my spouse? They have a regular w-2 paying job. Right now we file married filing joint.
Excelent video, thumbs up!
Thank you! Cheers!
Very affirmative thank you deeply I appreciate your efforts to share this.
Can I establish LLC with my SSN instead of tax id number for LLC..
What's the benefit and disbenefit of doing so please..
If you will pay any employees, you will need a Federal I.D. Number.
Its simple to apply for LLC entity via IRS portal...You will be assigned to have Federal EIN#. SSN is for individual income tax
Lovvvveeeeet!!!!!
great video, jus wonderin if I could get an opinion tho.. I got a newly started clothing brand and I was wondering how important is it for us to register the llc?
Very. We recommend registering any business you start.
Great video! Question…I am one of 3 owners (equal shares) of a small incorporated business. Our corporation has a brokerage account that has done very well. We’ve not paid ourselves any of the profits because we’ll have to pay corporate taxes, then personal. Is there a way to transfer the brokerage account to an LLC?
Is that 20% QBI tax deductions passed with the Jobs Act a one-time deduction or eligible for businesses yearly?
Yearly!
What about filling taxes with a music business LLC, can I write off almost everything
You can write off all reasonable and necessary expenses. You should check out our video on how to write-off almost anything!
Can I start off as llc and later change to s corp for the tax benefit
So if I have my own business but no LLC I can only write off 20% of my income? Im planning on getting an LLC this week. If the answer is yes, if I get one now will that let me write off more for 2020? Because my expenses did exceed 20% for 2020. Also, great video thanks!
Hi Gavin, the pass-through deduction applies to pass-through entities. This includes sole proprietors, LLCs, partnerships, and S-Corps. But there are other rules to using the deduction so you may want to research this a little more.
@@LYFEAccounting Okay sounds good, thanks for getting back to me!
@@GavinB211 You get to deduct your expenses whether you have an LLC or not. No matter how much the expenses are. You also get the 20% deduction (Section 199A if you want to google it) whether you have an LLC or not.
Does the IRS still consider Disregarded
I've a LLC and a FEIN Can you offer Some more info!
How much does it cost to setup LLC?
Request for you to create video vlog subject topic on Government pay people international travel to vacation with their business ,
Spoken by Shantel maxwell not tangie bass this is a shared channel with my mother
Do you have any videos on setting up a holding company?
Not yet, but that is a good idea! May make one soon :)
@@LYFEAccounting you do a great job of explaining these topics. So I second that.
I’m allllll about paying the least amount of taxes that I LEGALLY can. The government has bleed me enough.
Exactly.