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  #31  
Old 03-28-2014, 01:25 PM
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grassmonkey0311 grassmonkey0311 is offline
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Quote:
Originally Posted by gulfjoe View Post
You just annotate it as owner draw in the books and thats it? Do you pay taxes on it at the end of the year.
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From what was explained to me, yes, note it as an owners draw.

As for being taxed on it, I don't believe so because your being taxed on your business. If you were to be taxed on your income you'd have to be a W4 employee. This is my first year as an LLC so hopefully I'm giving you the right info!
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  #32  
Old 03-28-2014, 03:46 PM
AllBrad AllBrad is offline
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It is your taxes you will be paying. The business will not pay taxes unless it is incorporated or an llc elected to be taxed as an s corp. If you make 50,000 net income, you the owner will pay taxes on 50,000. The business does not owe taxes. It doesn't matter how much you pay yourself. Profit is profit and the person, not the business will owe. Get ready for self employment tax.
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  #33  
Old 03-28-2014, 04:27 PM
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Greg78 Greg78 is offline
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According to Legalzoom: Sole proprietorships, partnerships, LLCs and S corporations are pass-through entities for federal income tax purposes. This means these entities are not subject to income tax. Rather, the owners are directly taxed individually on the income, taking into account their share of the profits and losses. This avoids double taxation
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Last edited by Greg78; 03-28-2014 at 04:36 PM.
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  #34  
Old 03-28-2014, 11:56 PM
MV Property Care MV Property Care is offline
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Quote:
Originally Posted by CreativeLawncareSolutions View Post
Why do solo's and part time guys form LLC's in the first place? It just muddy's the water IMO. Go sole-prop. Write off every thing come tax time. Done.
That is a good opinion. If your employed full time then lawn care is extra money. I did lawn care part time for 6 years them my plant closed and I started advertising and went full time. I wanted more stability so I incorporated and teamed with a payroll vender. I fax in my input hrs worksheet every two weeks and then I get a paycheck direct deposit. You of course have to have a previous benchmark of your yearly gross. But having a payroll service do the work means you don't have to worry about sending in estimated quarterly income taxes because you get a paycheck. For one person getting a paycheck it's around 90bucks a month. But then you start hiring people and it's pennies more. You can do payroll thru quick books but I like it this way. But it's good advice to find a very good trustful person to help you with your quick books.
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  #35  
Old 03-29-2014, 02:58 PM
seaviewer seaviewer is offline
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Location: Wakefield, RI
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I have an S Corp and owner's draw or personal draw is technically called a K-1 Distribution. The K-1's you take throughout the year are not supposed to exceed the payroll you take. With that said, last year I did not take one payroll check, only K-1's. The money in the corporate checking account is only taxable when it is withdrawn and K-1's are taxed differently than payroll. As long as you keep the money in the corporate account it is sheltered. I find a way to pay for a lot of things with corporate checks that end up as deductibles. The only problem with being incorporated in RI is having to pay a $500 corporate excise tax yearly whether you make money or not.
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  #36  
Old 03-30-2014, 02:54 PM
dvaughn dvaughn is offline
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Join Date: Jul 2009
Location: indiana
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Because you are a single member LLC with no employees your profits are taxed. IRS treats this the same a sole proprietor.

Your single member LLC with NOT protect you if you were sued. It would only protect you if an employee made a mistake. If you are negligent you can get sued personally. The best way to limit not to geting sued personally is to have a lot of business insurance.. It could still happen but lawyers follow the money.
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  #37  
Old 03-30-2014, 09:19 PM
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Kelly's Landscaping Kelly's Landscaping is online now
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Quote:
Originally Posted by seaviewer View Post
. The only problem with being incorporated in RI is having to pay a $500 corporate excise tax yearly whether you make money or not.
The right to exist tax drives me nutts ours has been 250 a year since the 90s. They just changed that to 250 every 2 years so thats some relieve. But then they invented a silly filing for annual reports and have the nerve to want 150 per year on that. Again whether you make money or not.
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