Llc For Taxes?????
ok here's the scoop, I make about 130k, I'm an independant contractor(timeshare sales manager) I own a duplex l and a condo,for rentals plus my home. My accountant has mentioned that perhaps I should do an llc for tax purposes. I would greatly appreciate all help I hate to pay taxes but I'm not one of those constitutionally illegal tax guys
You have to ask your accountant to explain how an LLC will affect (reduce?) your taxes. Also, be sure to ask how the LLC is to organized for tax purposes.
Perhaps, instead, if you incorporate yourself and earn all your independant contractor income in an S-Corp your self-employment income tax bite could be lessened by taking a reasonable salary with the balance of your income declared a dividend.
The presence or absence of a LLC should have no effect upon your rental property tax treatment.
thanks dave,
I need to learn more about the s corp, it seems to come up quite a bit around here. I wondering what the diff is between s corp and llc.
I am not sure that you will find much in the way of tax advantages that you do not already have. If you set up an LLC with just yourself on the LLC it will be treated as a partnership for tax purposes. More or less as if the deals the LLC does were done by you directly. The transactions just show up on your tax return.
Now, there are other benefits (re: liability protection).
John
----------------- Moderator Note ----------------
By definition, a partnership has two or more partners. An LLC with two or more members can be treated as a partnership for tax purposes. But with "just yourself on the LLC", you have a single member LLC which will be treated for tax purposes either as a disregarded entity or as a corporation.[ Edited by DaveT on Date 05/25/2004 ]
I'm wondering if it would change anything if I add my wife. My wife is a stay at home mom so could I put her into the llc and benefit from that?
Mom is a valuable contrbutor to the LLC (wink), you'ld need to pay her a salary.