Legal Setup LLC

Discussion in 'Business Operations' started by cwmiller928, Feb 26, 2008.

  1. cwmiller928

    cwmiller928 LawnSite Member
    Posts: 109

    I'm trying to get set up as a LLC. I was told by my accountant that i will be taxed 25% on my NET income!?. Does this sound right? To say the least i about fell out of my chair. Whats the best way to get around that? Its only me working for myself so im a sole enity. Does that make any sence? Maybe i just wasnt expecting that high of a rate.
     
  2. p0wd3rp1l0t

    p0wd3rp1l0t LawnSite Member
    Posts: 30

    thats bologna...or atleast i sure has heck dont pay that. i write everything off...i mean EVERYTHING. best way aroudn it is get yourself a damn good tax company and they will more than pay for themselves ten fold easily. it works for me as only pay in i have had is ssc for the last 3 years plus any sales tx and employee but u dont have to wrry bout that
     
  3. dougaustreim

    dougaustreim LawnSite Senior Member
    Posts: 488

    With an LLC, profits pass through to the individuals tax return and you pay whatever rate you fall into. A regular C Corp pays taxes on profits and then the individuals pay again on dividends etc. The accountant was obviously talking about a C Corp not an LLC We actually have both kinds of entities here so I'm quite confident in what I am saying
    Doug
     
  4. RickR1818

    RickR1818 LawnSite Senior Member
    Posts: 342

    If the accountant can't keep the details between an LLC and a C Corp I would find another accountant.
     
  5. Johnson LCO

    Johnson LCO LawnSite Senior Member
    Posts: 336

    When you set up an llc you can set it up in one of two ways:
    1. Dead passthrough to individual owners (what you want)
    2. Corporate tax system that has double taxation (what your accountant says you have to do, pay individual taxes after the company has already paid its taxes.)

    When you set up a LLC with legalzoom or a lawyer, they ask you to specify which one you want. I am not sure of the differences in these but it was a question I was asked when setting up my llc. I chose dead passthrough for obvious reasons even though I dont know the differences in protection of assets or other advantages/disadvantages of each. I dont know if you can change the tax options if you have already filed. Hopes this helps.
     

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