Tax rate for LLC

Hey SGallaher,

Assuming you create a single-member LLC, all of your company's income would pass through to you as an individual. In other words, you would pay the same amount of income tax as you do right now. There is no separate corporate tax for LLC's.

A search of the Lawnsite will give you a quick start in learning more about this topic. Here are a few threads that will help you to learn more.


Thread 1.


Thread 2.


Thread 3.


Thread 4.


Thread 5.

Hope this helps.

A1, Let me help you out:

http://www.lawnsite.com/showthread.php?s=&threadid=49623

And with that'

Can you tell me how the new tax law will change my effective tax rate and the actual dollar amount if:

1) My business produces $75,000 net
2) My salary is $40,000 and the rest ($25K) is C-Corp net profit.
3) Spouse takes 2,300 as health insurance premiums.
4) My office & shop is my home which I rent to the business for $1,000/mo

And considering the new dividend rates should I stay as a C-Corp or convert to an S? And if so what is the expected annual effect positive or negative if I switch????

You wrote, 'any questions feel free to ask"...
And will you (Block) guarantee that answer???

I can only guarantee your return when I prepare it for a paying customer.

Ok business produces 75,000 net and you say you are a c corp.

your salary is $40,000, $35,000 goes to c- corp profit, and $12000 goes to you for rent of garage/shop.

The 35,000 profit would depend on what is done with it, dividends, bonus to CEO, retained. The 12,000 you effectively pay yourself would be reported on a E-1 Rental and Royalty which would then filter to your 1040. The spouse takes $2300 in insurance premiums. This part depends on if it is under a self employment plan, which could allow you certain credits and deduction, where a personal premium would be reported on your itemized deductions sch A.

An educated guess would mean that your income tax rate would be would be reduced from 27% to 25% . Your effective tax rate depends on credits among other things being that your effective tax rate by definition is a percetage of your income vs. actual tax paid.

If your taxable income is below $56,801, your tax rate does not change.

Hope this helps.
Why are you a C Corp to begin with ? And are there many shareholders? What do you have against " franchise tax preparers?". The computer programs used by Block make it pretty foolproof. Added to this, anything out of the ordinary needs to be checked by a senior preparer. We are all required to take a minimum amount of classes each year to get our jobs back.