taxes on an s corp and standard llc. confused!
5 Replies
Tim Speer from clarksville, Tennessee
posted over 1 year agoso i have a question on taxes. I searched the answers in the discussions but couldnt find the answers im looking for. So hopefully one of you all can help me.
So basically i have an s corp and llc. Filing with the 2 states as of yesterday.
for the s corp and llc how does the tax be determined?
Is it only what your business makes is taxed?
How does the process actually work.. thanks just a little confused is all. I heard for the llc only what you bring in is taxed, can anyone concur?
David Dachtera Investor from Yorkville, Illinois
replied over 1 year agoI think you'd do best to book some time with your accountant. That's rather a bit more than folks might be willing to go into here.
I'm connected to some excellent on-line REI education and in our classes "Tax and Legal" is two-day on-line class taught by a JD Tax Attorney / CPA Tax Accountant (he holds both licenses).
The short version, though, can be summed up like this:
W2 Employee: Earns income, taxes are taken, employer takes pre-tax and after tax contributions, and the employee gets what's left, if anything, to pay his/her expenses.
Business entity (S-Corp, LLC, etc.): Earns income, pays deductible expenses and gets taxed on what's left, if anything.
Hope that helps ...
Tim Speer from clarksville, Tennessee
replied over 1 year agoYes that helps alot! Whats that price on the class?
Vincent Incopero Professional from Elmhurst, Illinois
replied over 1 year agoScott Vance Investor from Fort Bragg, North Carolina
replied over 1 year agoBoth of these entities are pass-through entities for taxes. Meaning that the taxes pass through the entity and are taxed on your personal 1040. You will get a statement from both, called a K1. This statement will spell out the amount that is required to reported on your personal tax return on Schedule E or C depending on the particulars of each entity. Complicated with lots of little loophooles. I recommend speaking with your CPA or Enrolled Agent to get clarification and ensure you are following all the rules.
Fulton Sanchez from CPA Miami , Florida
replied over 1 year agoScott is right to the point. Any question PM or post it here and I will be happy to help you from a CPA pont of view.
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