Clients are often concerned with how to handle their LLC. The answer to this question is completely dependent upon how the LLC is taxed! Business Taxes Uniondale NY.
Let’s say you are the sole owner of your LLC – in this case, you would be filing a Schedule C on your Form 1040. This Schedule is simply an addition to your typical individual income tax return (Form 1040). Many clients are sad to hear that income generated on this schedule is subject to self-employment tax. There are strategies for avoiding this additional tax.
LLC/Partnership or S-Corporation
An LLC that has more than one member can be taxed as either a partnership or an S-Corporation. A partnership is filed on Form 1065 and is classified as a “pass-through” entity. This means that Form 1065 is simply an informational form that breaks down the income and expenses attributable to each partner. The partners then report their allocable income and expenses on their own individual income tax returns.
The same idea applies to the S-Corporation, except it is filed on Form 1120S. There are also other differences between an S-Corporation and a partnership. However, the S-Corporation is notorious for assisting taxpayers with cuttin down on the self-employment tax. Inquire with us as to how to go about electing S-corp status.
The keystone to successful business tax compliance is timely and accurate filings. The Tax Cuts and Jobs Act of 2018 has brought about significant changes in the business tax world. However, the tax filings for partnerships and S-Corps will continue to perplex taxpayers. David is here to assist you in navigating this climate. He will help you file your Form 1120S and/or your Form 1065. In fact, you can have confidence that he will take care of both your business and the individuals who are partners or shareholders in the business.
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