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Jan 10, 2019
11:49
:54
am
DirtyWater
All-American
S-corps also are passthrough entities. I think you mean C-corp and that
requires you to make an affirmative election and would provide a very bad tax result in his situation so he probably won't do that.
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DirtyWater
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DirtyWater
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Aug 29, 2005
Last login
Sep 28, 2024
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Messages
Author
Time
Question about LLC and taxes for you accounting gurus.
IrishBlue
1/10/19 11:30am
You have to pay yourselves a reasonable wage.
Ozymandias
1/10/19 11:33am
So I can't just write myself a check at the end of the month for 2k
IrishBlue
1/10/19 11:35am
If it were that easy to avoid FICA, we would all house our labor in an LLC.
Ozymandias
1/10/19 11:41am
This is incorrect. He is talking about an S-corp.
RexIdaCoug
1/10/19 11:48am
Guaranteed payments are still subject to FICA.
Ozymandias
1/10/19 12:07pm
Did I say they weren't? Wages should not be paid to owners of an LLC unless
RexIdaCoug
1/10/19 12:26pm
Well, I covered the S Corp issue elsewhere and since he was talking about
Ozymandias
1/10/19 12:28pm
Reasonable wage generally isn't an issue for an LLC. That is why.
RexIdaCoug
1/10/19 12:29pm
It is for an LLC that elects to be taxed as an S-Corp.
Ozymandias
1/10/19 12:31pm
Not an accountant, but we have an LLC that we file as a partnership
haYnCoug
1/10/19 11:38am
The LLC is a passthrough entity for tax purposes. You just ignore that it exist
DirtyWater
1/10/19 11:39am
Not necessarily true for an LLC that elects to be taxed as an s-Corp.
Ozymandias
1/10/19 11:41am
So if I am only making 5-10k a year, doesn't it make more sense to use the LLC
IrishBlue
1/10/19 11:44am
Probably so. It is only worth setting up a entity taxed as an S-Corp if the
Ozymandias
1/10/19 12:13pm
S-corps also are passthrough entities. I think you mean C-corp and that
DirtyWater
1/10/19 11:49am
If you are an SCorp you can pay yourself a reasonable salary and then if you
Ozymandias
1/10/19 12:08pm
Also I believe this is only true for single-member LLCs.
CougarBreath
1/10/19 11:43am
Nope. Still a passthrough entity. If you have multiple owners, they split the
DirtyWater
1/10/19 11:53am
You still have to file a 1065 partnership return. The word pass through is only
JAGA97
1/10/19 12:04pm
you need professional advice
lukeskywalker
1/10/19 11:44am
Yeah, my normal tax accountant is on vacation, but I was hoping to take care
IrishBlue
1/10/19 11:45am
Your tax software walks you through it. Pretty simple actually.
ClackamasCoug
1/10/19 11:58am
If you file as an LLC partnership as stated in your scenario you will file a
JAGA97
1/10/19 11:58am
Good to now about the business liability insurance. Probably overkill for our
IrishBlue
1/10/19 12:10pm
This is correct. The corporate veil protects owners of an LLC or corporation
BYUMizzou
1/10/19 12:49pm
Is this generally the case for a PLLC as well?
RexIdaCoug
1/10/19 1:07pm
yes. PLLC are generally limited to specific professions
BYUMizzou
1/10/19 1:38pm
<< Deleted >>
coolblue
1/10/19 12:39pm
You have some of it right, and some of your questions depend on whether you set
BYUMizzou
1/10/19 12:39pm
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