Are you worried that you are not taking advantage of ALL the benefits tax wise as a business owner of an LLC (Limited Liability Company)?
A limited liability company (LLC) is a business entity organized in the United States understate law. Unlike a partnership, all of the members of an LLC have limited personal liability for its debts. Depending on elections made and the number of owners, an LLC may be classified for federal income tax purposes as a partnership,corporation, or an entity disregarded as separate from its owner.
Here are some facts that can help you maximize the LLC advantages:
If an LLC has only one member and is classified as an entity disregarded as separate from its owner, its income, deductions, gains, losses, and credits are reported on the owner’s income tax return. For example, if the owner of the LLC is an individual, the LLC’s income and expenses would be reported on the following schedules filed with the owner’s Form 1040. So you only have to file ONE tax return!
Schedule C, Profit or Loss from Business (Sole Proprietorship),
Schedule E, Supplemental Income and Loss, or
Schedule F, Profit or Loss From Farming.
An individual owner of an LLC treated as a disregarded entity is not an employee of the LLC. The owner is subject to self-employment tax on the net earnings in the same manner as a sole proprietorship. So you must meet with your tax professional to take advantage of the legal tax savings of making elections as an LLC to help minimize the self-employment taxes. (Call Us)
Excludable fringe benefits are generally not allowed for owner. Exceptions: Health insurance if spouse is an employee, and the owner is covered as a family member of the employee-spouse. The spouse is also eligible for dependent care assistance fringe benefits, de minimis fringe benefits, and working condition fringe benefits.
Owner is personally liable for all debts and lawsuits against the business. Exception: If organized as an LLC, liability is usually limited to owner’s investment and his or her own malpractice or guarantees.
Home office expenses - Expenses that benefit only the area exclusively used for business, such as painting or repairs in the home office, are direct expenses that are fully deductible. Expenses for keeping up and running the entire home, such as insurance, utilities, and general repairs, are indirect expenses that are deductible based on the percentage of the home used for business.
Travel expenses include the ordinary and necessary expenses incurred by a taxpayer (generally for overnight stays) while on temporary travel away from his or her tax home for business purposes.
A deduction for meals is allowed (limited to 50%) if incurred while traveling on business or while entertaining a client or customer. The deduction for local meals is figured by using actual costs while the deduction for meals while out of town is figured by using actual costs or the standard meal allowance (per diem rate).
Entertainment expenses are not deductible, even if directly related to your business. Entertainment includes entertaining guests at nightclubs, at social, athletic, and sporting clubs, on yachts, or on hunting, fishing,
vacation, and similar trips.
This is a small list of deductions, but to make sure you are receiving all the deductions that you are eligible for do not hesitate to schedule a consultation with us. We have deductions by the industry! Life is too short to miss opportunities that are rightfully yours.
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Morrow, Georgia 30260
Office - 770-742-9136