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Discussion in 'Starting a Lawn Care Business' started by BillyRicketts, Apr 23, 2014.
What caused you to classify your business the way you did?
Advice from CPA/ legal counsel
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After you make a real sum of money your CPA will tell you it's time. Do it too soon and you don't survive. Basically how do you want to be taxed, what makes the most sense. Small business= self employed+income tax or LLC= no self employed tax+ you can earn a paycheck from an LLC. Don't think it all boils down to that, it doesn't but to someone who asks that question you did I gave you all you need to know.
Don't put LLC or anything on your marketing or esp. webpages if it isn't so. The man will come find you and stomp you.
A fine is a tax for doing wrong. A fee is a tax for doing right.
I looked at it from a tax standpoint and picked an LLC. Theres a lot of options, its just whats best for you and what you'd prefer.
a self employed Sole Proprietor pays income tax and self employment tax, true.
But If you are the sole owner of the LLC, it doesn't "save" you any money. You're still paying those taxes and fees when you pay yourself, just a different way.
I keep getting told(not here on LS) that if I form an LLC I should be able to save about 10%. Also I was told it gets me out of self-employed tax, but I don't know what it's replaced with or how it all adds up. I imagine I will have options if I go there and I will just pay the CPA to inform me. Is that at all right?
taxes are the same no matter what you are.
Partnership. Wife, stay at home mom, gets !/2 the profit and credit towards social security which will exceed survivor's benefits should I croak first. Has some good tax advantages as well.
That's kinda true. States tax differently state to state, Feds tax the same. So depending on how much you actually gross and how much the state tax is, blah blah you know the drill.
Yes the tax attorney/CPA will put you where ever he wants you.
Pay a pro to mow the lawn, Pay a pro to do the taxes. Don't try DIY.
However, just starting out, or part timing it, or solo ops under a certain amount, there's no Illegitimacy with sole prop. just remember articles of organization cost money too
got to weigh all the factors.
A company matches what you pay in Fica, SS, UI, etc
so that stuff that gets taken out a paycheck when you work for someone else?
The employer pays that too (otherwise known as payroll matching or labor burden)
So when you are your own employer, you pay your portion of that, as usual AND the employers portion of it, because now you are both people in one. (this is otherwise known as self employment tax)
it's all not that simple when you go over to an LLC, the equations and carrying this and that from line X to box Y etc etc, and what gets credited over there to over there
so it is quite possible to save 10% through an LLC entity paying taxes as a corporation. But that's why you pay that guy or gal 2% to save you 10%.
In my experience the CPA has always been worth the money, every time. (unless you're just filing a 1040EZ through turbo tax)
Working as a solo operator with no employees you can still get sued personally if you are a LLC.
Also starting out chances your income will not be high enough to take advantage of the tax laws.
So I would think when starting out with limited money going DBA sole proprietorship will work just fine.