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: ruclips.net/video/QFYFGfHOuwI/видео.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 RUclips attorneys just throw out terms like "schedule c" and "1065" like your supposed to know without ever explaining what's what.
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.
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
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.
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.
Hey, noticed you’re in Florida. I am a veteran trying to start a business in Florida. I’m 100 % disabled VA, and want to run the business out of my home. Can I do that and still use the tax credit for disabled vets? I have so many other business questions, I want to get this business going and I’m motivated to learn as much as I can before I plunge! Thank you for the information in this video, based on it I think I have an understanding of what choice I have to make soon.
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.
Great video Navi. You said an LLC originally elected to be taxed as a Sole Proprietor can later be re-elected to be taxed as an S Corporation once business proceeds exceed $40,000. Is that $40k per month or per year?
Hi Sam. Thanks for the feedback. To clarify a couple things…a single member LLC is taxed as a sole proprietorship by default (you don’t have to elect it). You can elect S Corp tax status whenever you want but in my opinion it usually doesn’t make financial sense to do so until your business creates $40,000 or more in annual profits. Hope that helps.
Love this break down on Business entities. A little confused here. I'm a realtor and have my single member LLC. Before my LLC generated close to $50,000 and now it's over 100K. Should I consider switching to C-Corp. ? Why or Why not?
In my opinion, if you're consistently going to making over $50k in profit (not revenue) then you should consider making the S Corp tax election for your single member LLC. I do not recommend C Corps for the overwhelming majority of small businesses. You can learn why in the the following videos: 1. What is an S Corp and is it right for your business: ruclips.net/video/jjGVLWPpviQ/видео.html 2. When does an S Corp make financial sense: ruclips.net/video/QFYFGfHOuwI/видео.html
Navi, thank you for this content. I have a question I hope you could answer. I see a lot of RUclips 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.
I'm learning so much from your videos. I realize that we need to hire an accountant because our tax agent has not been advising us well enough. However, when I hear "consult with your accountant or lawyer", I think that I'm just a small company (or planning to be) and I can't afford those professionals. In other words, what options does the "small business owner" have who can't afford a lawyer or accountant?
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
This is very helpful Navi. And you are correct, there is some confusing info in RUclips land. You say that an MM LLC can file taxes as an S-Corporation. I've also heard that it can file as a C-Corporation. Is that accurate?
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 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.
@@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?
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.
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
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.
Great video! For the S-Corp, you mentioned that one should consider forming it if the profit of the business exceeds about $40,000 or so. Are you referring to this number on a monthly basis or yearly?
Hey Christian! Thanks for the feedback. The $40k I’m referring to would be on an annual basis. Be sure to watch the video related to when does an S Corp make financial sense to further your understanding.
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.
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 for the information Maybe you can answer my question here, So I make 60k from my full time w-2 job, and I’m looking to start an LlC this year that’s going to make me 40k doing cargo deliveries for 2 different companies, each one will pay me a 1099 form 20k each for the year. So my question is if this business is an Sole Proprietor, LLC or Scorp?
Given this limited information, I would keep it taxed as a sole proprietorship. You can form a SMLLC and it will still be taxed as a sole proprietorship and may provide limited liability protection if you set it up properly and maintain it.
Awesome video Navi! I recently started a print-on-demand shopify business. However, I haven't created an entity for it yet. I'm making less than 40k a year from the business. This is a side business for me as I have a separate full-time job. Would you suggest for me to create a SM LLC entity and to be taxed as a Sole Prop?
Hi Sualah! Thanks for the feedback. Tough to comment on without knowing more information though. Depends on what your concerns are...form the LLC for legal reasons, not for tax reasons if the side business will produce less than $40k in profit. You may need to watch some of my other videos for my response to make sense.
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?
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
I’m an SCorp that pays myself $48K officer salary. If i don’t have to pay income tax on my net income, why am I trying so hard to get my expenses written off so that the net income is as low as possible? 😅 I understand that distributions are taxed as K-1, what if I don’t do distribution for the year and not have to pay tax on my 1040?
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?
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: ruclips.net/video/QFYFGfHOuwI/видео.html
Thanks for the video! Question. If I set up an LLC initially (say Jan 1, 2022), do I have some time to determine if I'd want to be taxed as an S-Corp? If I start getting customers on Jan 1, I wonder, would I have some time to assess how well my business is doing in order to determine if I'd want to be taxed as an S-Corp? You elude to tax filing, which would be March 2023, is that deadline by when I have to decide? That would give me the entire year to see if I can make a profit of $40k+. Thanks!
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.
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.
Thank you Navi, you explained so clearly! I’m starting a new business about heavy equipment rentals ( mini excavators, skid steers) I’ll have a foreign partner that doesn’t have a SSN. What type of entity do you think will fit for us ? Thank you so much for this video!
You're welcome. I can't give specific advice here but just a general note that an S Corporation cannot have shareholders (owners) that are nonresident aliens. Hopefully that gives you some guidance on how to proceed.
You're right...this video is intended for folks who have an operational business producing active income but if I reshoot it in the future, I may add that information. Thanks for the comment!
Great video as always, Navi! You explain things so much better than others. Do you do tax filings for small business owners or just consults? I’d love to work with you!
Thank you @A Self Guru....my clients outsource all of their accounting and tax to me. What I mean by this is I help them with their bookkeeping, tax planning, payroll (if necessary), tax filings etc. In other words, although I do prepare tax returns, I only do it for businesses where I handle everything else for them as well.
@@NaviMarajCPA thanks for the information, Navi! My business is already setup as Florida LLC with S corp and payroll is also outsourced, so I just need help with tax preparation and filing. So sounds like you don’t handle just that? What would be the best way to get in touch with you?
Hello Navi, Thank you for sharing this important information. I’m watching all your great videos. I have an LLC and file taxes as S. Corp. I didn’t know that as S.Corp I need to receive a reasonable salary and be in payroll as an employee. If I didn’t do payroll in 2021 and I won’t have the W2 because it is too late now. What is the best way to file my S. Corp taxes? Should I pay penalties? Thank you in advance.
Hey Ivan B...the advice I would give to someone in the situation you described would depend on other items. If you did NOT take the profits out of the business, you may not need to pay yourself reasonable compensation. If you did take profits, you may still have time to get with a payroll company and have them issue payroll for 2021. There are some other unofficial ways to do it but I won't be able to get into those details here.
Probably not but each state's requirements are different so I can't say for sure. As a general statement, it applies to professionals such as medical doctors, attorneys, CPAs, etc. but occasionally there are states that broaden this to other licensed professionals.
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.
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??
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?
If the SMLLC is taxed as a sole proprietorship, then it is April 15th and filed on Schedule C as part of your individual tax return (Form 1040). If you made an S Corp election for your SMLLC, then it is March 15th and requires Form 1120S.
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!
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
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?
You should explain what an S Corp is. It means all the profits and loses pass through to the owner. The corporation is not taxed on its profits. Sorry, this is going to be long, but if you want to know how some people pay no income tax on high incomes, read on. Depending upon the business you start, you can have huge amounts of depreciation on real estate and equipment that you can deduct as business expenses. You can lease a $100,000 piece of machinery, pay the lease monthly with minimal initial cash down, and take a non-cash deduction from the depreciation of $100,000 over the useful life of the equipment. At the end of the lease, you can buy the equipment for either $1 or fair market value. Non-cash means it is an actual expense of the business, and a deduction from income, that doesn't actually cost you any real money. Same thing if you own the building that houses your business. Not only can you deduct the mortgage expense, you get to claim depreciation on the building (but not the land). Any tangible property that isn't a fixture permanently attached to the building can be depreciated. Desks, filing cabinets, computers, monitors, paintings, phone systems, counters, displays, furniture, appliances, the list goes on. Put paint or wallpaper on the wall, no depreciation. Hang an oil painting that you paid $5,000 for, or a big screen TV that runs videos about your business on the wall were customers can see them and you can depreciate them. So, you can have a business that, after expenses, makes $100,000 cash profit. You pay yourself the $100,000, taxable to you. Now your business didn't make any money, dead break even. But that's before you take depreciation and amortization. Say your non-cash depreciation and amortization totals $50,000. Your business now has a $50,000 LOSS. That loss passes through to you too. You still have the $100,000 in cash you took out of the business and also a $50,000 paper loss. So instead of paying income taxes on $100,000, your taxable income is now $50,000. If you own a house and pay mortgage interest and property taxes, maybe you own a rental property, and you have other itemized deductions, you can get that $50,000 income down to some much lower number, say $25,000 or even less in TAXABLE income. The government under Trump's tax cut plan put a limit on the amount of property tax and state income tax you can deduct, which has an impact on this method of lowering your tax bill. But in the past, it was quite possible to have a six-figure CASH income and yet pay $0 in income tax. And if your business losses were large enough, and you couldn't use them all to shelter your ordinary income, you could carry them forward to future years. It's all 100% legal. Is it fair? I don't think so, but if the government creates a tax code that allows this, you and I would be fools not to take advantage of it. Let's not forget that if you go to the baseball game and take your best client or even a prospective client, and talk about business a bit, and you pay for the tickets, beers, hot dogs, parking, souvenirs, it is all a business deduction. Not just what you paid for your client, but what you paid for yourself too. Take your wife or your friend or your kids, NO DEDUCTION. The poor employee who drives a car to and from a job at the office or factory gets no deduction for his car expenses. Your business owns or leases a car, and you drive it to meet with a client or potential client, all those car expenses are deductible as business expenses. Have magnetic signs advertising your business on the car doors or wrap your vehicle in graphics promoting your business, and now 100% of your vehicle expenses are advertising expenses, fully deductible. The tax code heavily favors businesses. How you structure business and your life has an impact on how much tax you pay. How do you think Bezos, Trump, Buffet and other billionaires pay NO INCOME TAX and do it legally? You can do it too, if you own a business. If this is all too complex, get a good TAX CPA to help you. Be aware there are different kinds of CPAs just like there different kinds of doctors or lawyers. They are specialists mostly. If you were arrested for a crime, you'd want a criminal defense attorney and not a patent attorney. Based on this excellent video, Navi (whom I don't know) appears to know what he's talking about when it comes to business taxation but I assume he tried to keep it simple for the video. Navi, I am not a CPA or an attorney, just a former small business owner that used these strategies. My startup retail business took two years to get profitable, so that loses at the beginning were very real. If I am wrong about any of this, please feel free to correct me.
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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: ruclips.net/video/QFYFGfHOuwI/видео.html.
Big strategic person-person business development is the key to success in today's business world.
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!
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!
Excellent diagram and explanation. I haven't seen anything explained this well. These RUclips 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.
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 for not having an accent, this was extremely pleasant to watch.
This was the single best explainer video of the different Corp types I needed to learn about. Thank you!
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.
Thank you. A team discussing with me my Financial Reporting course.
Sir, you explain in a way that an average person like me can understand. Thank you.😇😇😇
It's kinda important to mention WHERE you are and which jurisdictions oversee that!
I cannot overstate how helpful this video was. Thank you!
Thanks so much Sheena! Really appreciate the feedback.
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.
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
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.
Thank you so much, I'm currently researching the best option for a brand new small business.
Great - glad the videos are helpful!
Super helpful, Navi. Thank you. Such a great, concise explanation that I haven't found anywhere else!
I've been researching information all day. your video was straightforward and very helpful. Thank you.
You’re welcome Whitney…glad it was helpful!
Excellent video! Short, to the point, with easy to understand illustration. Thank you!
I appreciate you mention the SM LLC, no others yet have.
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.
I didn’t even know about PLLC.. this video was so helpful and necessary
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.
This is excellent - coming from a tax attorney / CPA! Looking back through your videos to see how you got into doing this!
Thank you! Your videos are most informative and very easy to listen to. The best!
Thank you for the feedback John - means a lot!
Keep up the videos boss, the community needs more information from qualified individuals!
Will do!
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!
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.
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!
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.
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!
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.
Amazing information. Easy to follow and understand. Great presentation.
Thanks for the feedback @Bd Manus!
Excellent video! Thanks for sharing! I have shared with others studying for the CPA.
Short and to the point - much appreciated!
Thanks Rinaldo!
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. ❤
Hey, noticed you’re in Florida. I am a veteran trying to start a business in Florida. I’m 100 % disabled VA, and want to run the business out of my home. Can I do that and still use the tax credit for disabled vets? I have so many other business questions, I want to get this business going and I’m motivated to learn as much as I can before I plunge! Thank you for the information in this video, based on it I think I have an understanding of what choice I have to make soon.
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?
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.
Great video Navi. You said an LLC originally elected to be taxed as a Sole Proprietor can later be re-elected to be taxed as an S Corporation once business proceeds exceed $40,000. Is that $40k per month or per year?
Hi Sam. Thanks for the feedback. To clarify a couple things…a single member LLC is taxed as a sole proprietorship by default (you don’t have to elect it). You can elect S Corp tax status whenever you want but in my opinion it usually doesn’t make financial sense to do so until your business creates $40,000 or more in annual profits. Hope that helps.
Love this break down on Business entities. A little confused here. I'm a realtor and have my single member LLC. Before my LLC generated close to $50,000 and now it's over 100K. Should I consider switching to C-Corp. ? Why or Why not?
In my opinion, if you're consistently going to making over $50k in profit (not revenue) then you should consider making the S Corp tax election for your single member LLC. I do not recommend C Corps for the overwhelming majority of small businesses. You can learn why in the the following videos:
1. What is an S Corp and is it right for your business: ruclips.net/video/jjGVLWPpviQ/видео.html
2. When does an S Corp make financial sense: ruclips.net/video/QFYFGfHOuwI/видео.html
Really good video. Cleared some things up in my head since I am a noob.
Navi, thank you for this content. I have a question I hope you could answer. I see a lot of RUclips 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.
I'm learning so much from your videos. I realize that we need to hire an accountant because our tax agent has not been advising us well enough.
However, when I hear "consult with your accountant or lawyer", I think that I'm just a small company (or planning to be) and I can't afford those professionals.
In other words, what options does the "small business owner" have who can't afford a lawyer or accountant?
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
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.
This is very helpful Navi. And you are correct, there is some confusing info in RUclips land. You say that an MM LLC can file taxes as an S-Corporation. I've also heard that it can file as a C-Corporation. Is that accurate?
Hi Leva...thanks for the feedback! Yes, a MM LLC can also elect to be taxed as a C Corporation by filing Form 8832 with the IRS.
Mr Navi this was great information as a novice beginner
Thank you! it was so hard to find this information. You got right to the point
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 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.
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?
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.
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.
Thank you so much. This was very helpful! Heading to Google to find a local CPA now!
Great content!!! My question is, does it apply in Canada?
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
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.
Awesome video, just one question-Where do Enterprise Incorporate fall in?
Not sure I understand your question.
Very useful video! I'll recommend it to my colleagues
Thanks for the feedback Anastasiya. Hope your colleagues find it helpful as well.
Thanks for the easy explanation. Subscribed ! 👍
Great video!
For the S-Corp, you mentioned that one should consider forming it if the profit of the business exceeds about $40,000 or so. Are you referring to this number on a monthly basis or yearly?
Hey Christian! Thanks for the feedback. The $40k I’m referring to would be on an annual basis. Be sure to watch the video related to when does an S Corp make financial sense to further your understanding.
@@NaviMarajCPA Will do! Thank you so much.
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.
You are so clear thank you so much. You got a new subscriber 😊🤓👍🏾
Appreciate the feedback Cocoa...thanks for subscribing!
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 for the information
Maybe you can answer my question here,
So I make 60k from my full time w-2 job, and I’m looking to start an LlC this year that’s going to make me 40k doing cargo deliveries for 2 different companies, each one will pay me a 1099 form 20k each for the year. So my question is if this business is an Sole Proprietor, LLC or Scorp?
Given this limited information, I would keep it taxed as a sole proprietorship. You can form a SMLLC and it will still be taxed as a sole proprietorship and may provide limited liability protection if you set it up properly and maintain it.
Thank you so much for this valuable information! Be blessed!
Awesome video Navi! I recently started a print-on-demand shopify business. However, I haven't created an entity for it yet. I'm making less than 40k a year from the business. This is a side business for me as I have a separate full-time job. Would you suggest for me to create a SM LLC entity and to be taxed as a Sole Prop?
Hi Sualah! Thanks for the feedback. Tough to comment on without knowing more information though. Depends on what your concerns are...form the LLC for legal reasons, not for tax reasons if the side business will produce less than $40k in profit. You may need to watch some of my other videos for my response to make sense.
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?
Thank you so much for making this video. It is very helpful.
You’re welcome Kushagra!
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.
I’m an SCorp that pays myself $48K officer salary. If i don’t have to pay income tax on my net income, why am I trying so hard to get my expenses written off so that the net income is as low as possible? 😅
I understand that distributions are taxed as K-1, what if I don’t do distribution for the year and not have to pay tax on my 1040?
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 RUclips comment section.
Can you have multiple businesses in an LLC? As a Realtor and a Landlord would it benefit to have a PLLC instead?
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?
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: ruclips.net/video/QFYFGfHOuwI/видео.html
Thanks for the video! Question. If I set up an LLC initially (say Jan 1, 2022), do I have some time to determine if I'd want to be taxed as an S-Corp? If I start getting customers on Jan 1, I wonder, would I have some time to assess how well my business is doing in order to determine if I'd want to be taxed as an S-Corp? You elude to tax filing, which would be March 2023, is that deadline by when I have to decide? That would give me the entire year to see if I can make a profit of $40k+. Thanks!
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.
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.
Thank you Navi, you explained so clearly! I’m starting a new business about heavy equipment rentals ( mini excavators, skid steers) I’ll have a foreign partner that doesn’t have a SSN. What type of entity do you think will fit for us ? Thank you so much for this video!
You're welcome. I can't give specific advice here but just a general note that an S Corporation cannot have shareholders (owners) that are nonresident aliens. Hopefully that gives you some guidance on how to proceed.
You didn't mention self-employment taxes are paid by Schedule C income businesses, but not Schedule E income businesses.
You're right...this video is intended for folks who have an operational business producing active income but if I reshoot it in the future, I may add that information. Thanks for the comment!
Great video as always, Navi! You explain things so much better than others. Do you do tax filings for small business owners or just consults? I’d love to work with you!
Thank you @A Self Guru....my clients outsource all of their accounting and tax to me. What I mean by this is I help them with their bookkeeping, tax planning, payroll (if necessary), tax filings etc. In other words, although I do prepare tax returns, I only do it for businesses where I handle everything else for them as well.
@@NaviMarajCPA thanks for the information, Navi! My business is already setup as Florida LLC with S corp and payroll is also outsourced, so I just need help with tax preparation and filing. So sounds like you don’t handle just that? What would be the best way to get in touch with you?
Hello Navi,
Thank you for sharing this important information. I’m watching all your great videos. I have an LLC and file taxes as S. Corp. I didn’t know that as S.Corp I need to receive a reasonable salary and be in payroll as an employee. If I didn’t do payroll in 2021 and I won’t have the W2 because it is too late now. What is the best way to file my S. Corp taxes? Should I pay penalties? Thank you in advance.
Hey Ivan B...the advice I would give to someone in the situation you described would depend on other items. If you did NOT take the profits out of the business, you may not need to pay yourself reasonable compensation. If you did take profits, you may still have time to get with a payroll company and have them issue payroll for 2021. There are some other unofficial ways to do it but I won't be able to get into those details here.
@@NaviMarajCPA Thank you Navi for responding my question. How I can set up a meeting with you?
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?
This is a great breakdown, thank you so much. Does a PLLC also apply for license (Certification) in Education?
Probably not but each state's requirements are different so I can't say for sure. As a general statement, it applies to professionals such as medical doctors, attorneys, CPAs, etc. but occasionally there are states that broaden this to other licensed professionals.
@@NaviMarajCPA understood, I will double check. Thank you.
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.
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??
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?
Awesome information!! Is the single member LLC due March 15th or April 15th?
If the SMLLC is taxed as a sole proprietorship, then it is April 15th and filed on Schedule C as part of your individual tax return (Form 1040). If you made an S Corp election for your SMLLC, then it is March 15th and requires Form 1120S.
@@NaviMarajCPA thanks! What if it is a SMLLC taxed as a sole proprietor but filed on Schedule E? Would that make a difference?
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!
Very well put together. Thank you.
You’re welcome…let me know if there is anything else you need help understanding.
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
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?
You should explain what an S Corp is. It means all the profits and loses pass through to the owner. The corporation is not taxed on its profits. Sorry, this is going to be long, but if you want to know how some people pay no income tax on high incomes, read on.
Depending upon the business you start, you can have huge amounts of depreciation on real estate and equipment that you can deduct as business expenses. You can lease a $100,000 piece of machinery, pay the lease monthly with minimal initial cash down, and take a non-cash deduction from the depreciation of $100,000 over the useful life of the equipment. At the end of the lease, you can buy the equipment for either $1 or fair market value.
Non-cash means it is an actual expense of the business, and a deduction from income, that doesn't actually cost you any real money. Same thing if you own the building that houses your business. Not only can you deduct the mortgage expense, you get to claim depreciation on the building (but not the land).
Any tangible property that isn't a fixture permanently attached to the building can be depreciated. Desks, filing cabinets, computers, monitors, paintings, phone systems, counters, displays, furniture, appliances, the list goes on. Put paint or wallpaper on the wall, no depreciation. Hang an oil painting that you paid $5,000 for, or a big screen TV that runs videos about your business on the wall were customers can see them and you can depreciate them.
So, you can have a business that, after expenses, makes $100,000 cash profit. You pay yourself the $100,000, taxable to you. Now your business didn't make any money, dead break even. But that's before you take depreciation and amortization. Say your non-cash depreciation and amortization totals $50,000. Your business now has a $50,000 LOSS. That loss passes through to you too. You still have the $100,000 in cash you took out of the business and also a $50,000 paper loss.
So instead of paying income taxes on $100,000, your taxable income is now $50,000. If you own a house and pay mortgage interest and property taxes, maybe you own a rental property, and you have other itemized deductions, you can get that $50,000 income down to some much lower number, say $25,000 or even less in TAXABLE income.
The government under Trump's tax cut plan put a limit on the amount of property tax and state income tax you can deduct, which has an impact on this method of lowering your tax bill. But in the past, it was quite possible to have a six-figure CASH income and yet pay $0 in income tax. And if your business losses were large enough, and you couldn't use them all to shelter your ordinary income, you could carry them forward to future years.
It's all 100% legal. Is it fair? I don't think so, but if the government creates a tax code that allows this, you and I would be fools not to take advantage of it.
Let's not forget that if you go to the baseball game and take your best client or even a prospective client, and talk about business a bit, and you pay for the tickets, beers, hot dogs, parking, souvenirs, it is all a business deduction. Not just what you paid for your client, but what you paid for yourself too. Take your wife or your friend or your kids, NO DEDUCTION.
The poor employee who drives a car to and from a job at the office or factory gets no deduction for his car expenses. Your business owns or leases a car, and you drive it to meet with a client or potential client, all those car expenses are deductible as business expenses. Have magnetic signs advertising your business on the car doors or wrap your vehicle in graphics promoting your business, and now 100% of your vehicle expenses are advertising expenses, fully deductible.
The tax code heavily favors businesses. How you structure business and your life has an impact on how much tax you pay. How do you think Bezos, Trump, Buffet and other billionaires pay NO INCOME TAX and do it legally? You can do it too, if you own a business.
If this is all too complex, get a good TAX CPA to help you. Be aware there are different kinds of CPAs just like there different kinds of doctors or lawyers. They are specialists mostly. If you were arrested for a crime, you'd want a criminal defense attorney and not a patent attorney.
Based on this excellent video, Navi (whom I don't know) appears to know what he's talking about when it comes to business taxation but I assume he tried to keep it simple for the video.
Navi, I am not a CPA or an attorney, just a former small business owner that used these strategies. My startup retail business took two years to get profitable, so that loses at the beginning were very real. If I am wrong about any of this, please feel free to correct me.