So if you're taking clients or business partners / execs from other companies out to play golf, can you expense that? I know if you take them out to eat and expense it, it's acceptable. Mountain biking sounds a little ridiculous but where exactly is the line drawn?
Tax
- Thread starter o hai guyz
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So if you're taking clients or business partners / execs from other companies out to play golf, can you expense that? I know if you take them out to eat and expense it, it's acceptable. Mountain biking sounds a little ridiculous but where exactly is the line drawn?
I paid about $200 in mandatory fines a few years ago because my quarterly payments weren't high enough. It sucked because my income for the year was 10% earned in Q1, Q2, and Q3 each and about 70% in Q4. I paid proportionally but I "should" have paid 25% of the total each quarter.
Seriously though, get an accountant. There might be some good tips on here, but counting on Tax advice from an internet forum = asking for trouble.
Any of you guys set up an LLC and just run it by yourself as a single disregarded entity? This is what I did, and now I'm thinking I made a mistake and should have done an S-Corp.
Are there any creative ways I can run the LLC to lower my tax exposure or creative ways I can pay myself to limit my personal tax liability? Nothing kinky, just ways to worth within the system. I've just been paying myself a salary each month and keeping enough money in the LLC account to cover my monthy expenses. Technically the LLC isn't going to make a profit this year. After deducting all of my home office space, office purchases and expenses, I'll be showing a loss. However personally, I will obviously be on the hook for all of the taxes on the income I've been paying myself. Maybe I"m doing this wrong, I don't know. I meet with the CPA for 09 taxes in February so I'm going to pick his brain on it too. Just curious what you LLC'ers do.
Are there any creative ways I can run the LLC to lower my tax exposure or creative ways I can pay myself to limit my personal tax liability? Nothing kinky, just ways to worth within the system. I've just been paying myself a salary each month and keeping enough money in the LLC account to cover my monthy expenses. Technically the LLC isn't going to make a profit this year. After deducting all of my home office space, office purchases and expenses, I'll be showing a loss. However personally, I will obviously be on the hook for all of the taxes on the income I've been paying myself. Maybe I"m doing this wrong, I don't know. I meet with the CPA for 09 taxes in February so I'm going to pick his brain on it too. Just curious what you LLC'ers do.
LMFAO, are you fucking high? You're not going to jail unless you are doing some seriously shady shit. Are you going to get fined? Hell yes.
That is exactly what I intended. I'm not talking about the paperboy who made $601 a year and didn't file because he was a $1 over. I'm talking about the guys who are hiding cash in offshore accounts or laundering money.
A surprising number of people do that for < 7 figures.
What's the point of that? Don't you end up paying the same amount of tax anyway (since you now have to personally pay tax on your "salary"), versus just paying yourself dividends from your after-tax business income by withdrawing/wiring yourself the money?
By default at the federal level a single member LLC is considered as a disregarded entity for tax purposes and the business entity is in place for liability reasons only. In this scenario all LLC income and expenses gets passed on to your (individual) tax returns as income and deductions respectively. Paying yourself a salary etc makes no difference to the taxes you pay in this scenario.
But you can elect to have your LLC taxed as an S-Corp at the federal level (not sure how this works out at the state level). In this scenario you can pay yourself a salary which will be considered as income where you pay the income tax rate. And you can pay yourself shareholder distributions for the rest (I believe) which are taxed at a different rate.
You can backdate your election for the LLC to be taxed as an S-Corp up to 75 days I think.
Here is a link to the irs page for more info: irsDOTgov/faqs/faq/0,,id=199633,00.html (didn't want to put a direct link. Replace "DOT" with ".")
Disclaimer: I am not an attorney and this is not legal advice. Please talk to a tax attorney/professional before making a decision or taking any action.
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