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Discussion in 'Business Operations' started by DFREAMGREEN, Jan 15, 2013.
Keep business and personal separate. Get a tax id #
I am a LLC as well and yes you need a Fed Tax Id, you just apply for it for to the IRS form SS-4.
I am a solo owner LLC. But me (myself) and my business are two seperate people in the eyes of the goverment and creditors. Remember that an LLC, inc, etc are like a new born baby and like when you went to buy your first care or get a loan you had no credit. Your business has no credit till you establish credit with your business. I would also recommend going and getting a DUNS number from Dun and Bradstreet this will help in that area too.
The advantage of a solo owner LLC is when I do my taxes at the end of the season both my two incomes me/business are one for TAX purposes only.
I think the new rules now is not to get an EIN and to use the SSN unless you have employees.
LLC is great for solo and it is not a way to hide debt and skip out. It is a way to protect personal assets from business law suits. You often are required by lenders to personally guarantee loans.
If you mix business accounts with personal accounts as a matter of routine then a lawyer will break through the LLC shied.
So if you are a LLC how do you get paid? Like would you deposit all the income form the buisness into a buisness account and the from that account say pay your personal bills? Idont know..any ideas?
Couple of different ways,You can give yourself a pay check each week just like an employee and pay all taxes on it. Or take a draw ,then at the end of the year and your books are closed it will transfer to your personal taxes and taxes are due then. What ever you do write a company check to yourself and deposit it into your personal account then pay bills.
Well wouldn't that make you pay double the taxes? One for your buisness and then one for you??? Send me a pm about it
Very close, as an LLC you have to elect how you want to be taxed. If as a C-Corp you can cut a check. If as a Sole then you take a draw.
The IRS knows LLC's exist but do not determine taxes. You have those two choice
There is double taxation for self employed and corporations
As you said,I'm a corp so all profits are passed through to my personal income tax.
Single owner llc's (and others for that matter) are capable of pass through taxation. This is also an avenue for sole props, but I personally like the LLC better for the protections it can offer on financial disasters that could occur. Yes there are limitations to this, but if you keep your LLC account separate from personal funds, the business can theoretically go bankrupt without taking you down with it. In all honesty it just offers you a bit more protection for your family if you were to ever find the business completely overextended and on the brink of bankruptcy. As for other liability issues, that's a slightly different story (say you were to do $100,000 worth of damage to a property by accident) you better have a good umbrella policy for your insurance.
Back to the point. Pass through taxation is a very nice perk for anyone in business and is one of the main reasons I decided to go into business for myself. Do some research on it with a simple google search and you will quickly understand some of the benefits.