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).
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
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 ?
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.
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 ?
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 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..
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.
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 ?
I want to setup an llc as non US citizen with the intention of trading stock and optionsin US brokerage account. How do i setup, pay myself and also how withholding tax will be treated for dividends.
@@LYFEAccounting i have 3 issues. One is that i have a brokerage account with a US broker but it allows me to buy stocks but not trade in options as my country India has regulations to that effect and i cannot open margin account with US broker and cannot trade margin products like stock or index options. Second i understand that for non US citizens if i get dividends some of it withheld as withholding tax. These are 2 reasons and 3rd thing is that i want to save tax overall on my profits.
@@sshetty9683 You are still subject to withholding whether you own the brokerage account directly or whether through an LLC, meaning the withholding requirement doesn't disappear if you own it through an LLC. In India, you may be able to claim a foreign tax credit for the US withholding taxes, essentially offsetting your India taxes by your US tax withholding, so you aren't double taxed. A foreign tax credit is common, but you'll have to look at the specific rules in India.
@@joeb1522 thanks for your reply. Does opening an llc allow a foreign individual to stay in USA. I would like to avail your services if you can provide me solution to trading in US markets and saving tax by moving to another country with zero tax.
@@sshetty9683 I am not doing taxes for people right now (at least not new clients). The author of this video may be able to assist. Being an owner of an LLC is not related to being able to live and/or work in the US. I suspect it's similar in most countries. The US has tax treaties with several countries, which are listed here. www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z. If you go to India /US treaty, article 10 says the withholding tax rate is 25% on dividends (unless you own 10% or more of the company, then it's 15% withholding). If the US doesn't have a treaty with the other country, then the withholding is 30%. It seems strange to move and became a resident of another country to save on tax withholding. It's quite possible you can get a foreign tax credit in India for the US withholding tax paid. I would ask a tax advisor in India who knows India tax law.
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.
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?
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?
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).
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)
![14 Biggest Tax Write Offs for Small Businesses! [What the Top 1% Write-Off]](/img/tr.png)
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 RUclips :)
@@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!
Thank you! Your video was easy to understand and follow! I truly appreciate you taking the time to make this video!
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!
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
Thank you for making this subject understandable!
Very well explained video. Thank you!
Good stuff! Very informative, thanks.
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....
@@Playlisteddd 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
@@Playlisteddd Jealousy shows to people reading. It shows!!
Great video, My dude from GSU doing great things!
Go lopes lol
GM excellent video this CPA did a great job.
Hey, thanks!
Excellent Experience Awesome Awakening Thank You I Subscribed
You can be a great teacher :). You made things easy to understand. Thank you,
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.
Awesome explanation. Clear voice and easy to understand.
Thanks much
This video was so well put together and informative.
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
Thanks for sharing this good info!
Thanks for watching
The best explanation!!
You do a great job in making mundane tax laws exciting to learn about. Thank you
I appreciate that!
Perfectly explained!
Gracias
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.
Definitely helpful! Time to hit the books!
Thank you!
You're welcome!
Great vid! Very easy to follow and great explanations!
I clicked like video. LLC are legal tax loops holes, there I fixed it :)
Love from India 🇮🇳
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
Thank you, concise info!
Glad it was helpful!
Great info, straight to the point, very professional
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.
Amazing Content! Thanks for sharing!
Our pleasure!
Can you explain pass through tax deductions better please. And what qualifies
Awesome video !!
Glad you enjoyed it
Great information and very informative
Glad you think so!
Awesome stuff 🖖🏾🤓
Is there a video to the Passive business owner LLC?
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.
Thank you for the info!
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 ?
Pass through taxation benefits are at the state level or the federal level??
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.
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
Do you recommend for a new virtual assistant a llc or sole proprietor?
Good info thanks 👍
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.
so your w2 income is not a deduction to your c corp?????
Great info!! Subscribing !!
Thanks for the sub!
Great content
I hope its great enough for you to subscribe? :)
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
Excellent video , question can an lllc be created and work with crypto?
It can!
A great entity for people just starting out
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?
Very helpful thanks!
Glad it was helpful!
Great information
Thank you, Steven!
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 ?
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.
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 🙂
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.
Question, i just created an llc for a new biz. Should i file an 8832?
Well done video.
Thanks for the visit, just curious, which part did you find most valuable?
Interesting example!
Glad you thought so
Does the IRS still consider Disregarded
Can I start off as llc and later change to s corp for the tax benefit
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
I've a LLC and a FEIN Can you offer Some more info!
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.
The LLC doesn't run business in the US, and the sole member is not resident. Does have to pay taxes in US? Thanks
How much does it cost to setup LLC?
Thanks for the vid
You bet
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 $800.
@@ItsDan123 thank you so much
Thank you for the information
You bet!
Series LLC for apartment buildings?????
I'm so confused and frustrated. I've wanted to start a business for 4 years but I still don't understand this...
How is it a loophole if it's the law?
In your calculation for C corporation i wonder if i understands correctly. If your company make 100.000$ 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 ?
Thank you.
Good info
Glad you think so!
I want to setup an llc as non US citizen with the intention of trading stock and optionsin US brokerage account. How do i setup, pay myself and also how withholding tax will be treated for dividends.
Do you mind telling us why you want to set up an LLC to trade stocks
@@LYFEAccounting i have 3 issues. One is that i have a brokerage account with a US broker but it allows me to buy stocks but not trade in options as my country India has regulations to that effect and i cannot open margin account with US broker and cannot trade margin products like stock or index options. Second i understand that for non US citizens if i get dividends some of it withheld as withholding tax. These are 2 reasons and 3rd thing is that i want to save tax overall on my profits.
@@sshetty9683 You are still subject to withholding whether you own the brokerage account directly or whether through an LLC, meaning the withholding requirement doesn't disappear if you own it through an LLC. In India, you may be able to claim a foreign tax credit for the US withholding taxes, essentially offsetting your India taxes by your US tax withholding, so you aren't double taxed. A foreign tax credit is common, but you'll have to look at the specific rules in India.
@@joeb1522 thanks for your reply. Does opening an llc allow a foreign individual to stay in USA. I would like to avail your services if you can provide me solution to trading in US markets and saving tax by moving to another country with zero tax.
@@sshetty9683 I am not doing taxes for people right now (at least not new clients). The author of this video may be able to assist. Being an owner of an LLC is not related to being able to live and/or work in the US. I suspect it's similar in most countries. The US has tax treaties with several countries, which are listed here. www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z. If you go to India /US treaty, article 10 says the withholding tax rate is 25% on dividends (unless you own 10% or more of the company, then it's 15% withholding). If the US doesn't have a treaty with the other country, then the withholding is 30%. It seems strange to move and became a resident of another country to save on tax withholding. It's quite possible you can get a foreign tax credit in India for the US withholding tax paid. I would ask a tax advisor in India who knows India tax law.
Sincere Meadows
West Ridge
GREAT video 🔥🔥
Thanks! 😃
Thanks, I'm kinda a dumbass who wasn't paying attention in class ☠️, but I'll definetly pass now
How to file your LLC taxes???
Subscribe; we'll push out some content on this soon. - Sherman
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?
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
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
logically inconsistent information, but technically factual
Excelent video, thumbs up!
Thank you! Cheers!
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 that 20% QBI tax deductions passed with the Jobs Act a one-time deduction or eligible for businesses yearly?
Yearly!
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.
Windler Highway
Thanks
Welcome
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.
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!!!
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 C corp have to pay a reasonable salary to the only officer?
IRS and the courts focus on whether the compensation is reasonable for the services the employee performs.
You’re thinking of S Corp. C Corp pays dividends. It can pay salaries, but more often pays dividends.