Thanks for the great vidoe. Really helpful. Two questions: 1) is Member Distribution part of the LLC's expenses, which means we don't pay tax on it because we pay tax based on net profit after all expenses? 2) I'm a lil confused on whether we should allocate taxes (both income tax from net profit and self-employment tax) amount from the 50% we pay ourselves or the other 50%? Thank you.
Thank you for replying. 3 out of 5 YouTubers, in my own experiences, don't reply. So a big thank you to you! If you don't mind, I have another concern: I came across this article yesterday
and the author was able to articulate on a subject of my concern: protection on LLC owner's privacy.
"Despite occasional abuse, Nevada's privacy protections do offer value to the legitimate and law-abiding businessperson. Probably the single greatest benefit of Nevada's privacy protections is that it serves to protect business owners from unscrupulous creditors, aggressive attorneys and frivolous litigation.
The real victory is not to ever be sued. Experienced businesspersons and lawyers know this. Nevada's privacy protections can go a long way in achieving this goal by effectively hiding business owners from public view and thereby protecting them from litigation."
NV's law does protect LLC owner's identity but unfortunately not its officers and managers. And on their article of Organization, owner is required to list initial manager on the form. And as a single member LLC owner, that means our name has to be on the form, which then become public record. NV even require owners to file an Annual List of officers, where all officers names and information are required, which then also become public record.
I have talked to an attorney here in California about this issue but he doesn't really appreciate and recognize my concren on this because his years' of practices did not justify this concern and it's highly unlikely unless you're a celebrity of some sort. I don't want to get racial, but he's a middle-aged caucasian male attorney in an affluent neighborhood so most of his clients probably also fall under that same econimic umbrella. I, on the other hand, is a person of multiple minority background and being discredited for what I said (that's if I event get to talk) and what I do is a regular scene in my everyday life. And to put my small business, which is a website in a very competitive online industry, and a project I've been working on for a very long time with all my heart and soul, under an extra unnecessary layer of risk by exposing my identity on LLC documents is a notion that simply betrays my common sense and conscience. Especially all this can be all avoided by just not showing my name from the get go.
Now after learning the fact that single member LLC's corporate veil is relatively more susceptible to being penetrated (thanks to your another well-done video) , ID protection has become an even bigger concern to me.
I've been debating setting up my LLC among Seattle (lower state tax), Las Vegas (no state tax) and Denver (located in the healthiest state). After watching several of your videos, I'm wondering how is Colorado LLC law in terms of protecting single member LLC owner's privacy, especially when the owner doesn't want to hire an outside manager to manage the business? Thank you and sorry for the long reply. Have a great weekend!
Great question! No, the member distribution is NOT a deductible expense. That's why the IRS taxes all of the profit regardless of whether you've paid it to yourself or not. However, if the LLC is taxed as an S Corp, the reasonable salary portion is a deductible payroll expense (since the payroll taxes are taken out of the salary).
As an S corp, do you have to pay yourself via payroll every month or can you do one 940 and 941 at the end of the year? As for the dividend is that part of payroll? Or can you do member draws outside of payroll and call it a dividend at the end of the year?
So after watching this I was fearful I would have to pay SE tax if I did an LLC for my rental property but I just read that rental properties even when actively managed are considered passive income and not subject to SE tax. Can you please confirm his? Thanks
the best video on the topic. Question im a bit confuse as to when people say take money from your llc account and some goes to payroll, some to saving account some put aside for taxes and some for your investment account. are these actually accounts in the bank attached to your llc or these are accounts on your business books which does not exist in the bank?
Wow! Great videos. Just discovered the channel and the way you explain legalize ( is that a word:), makes it very easy to retain! Your sense of humor is wonderful and your graphics "dept" is top notch:) I believe wine may be assisting them:)
I always imagined, should I ever start a YT channel, I'd have 'state of the art' graphics as well, so when you pulled out the graphics I was pleasantly surprised.
I'll have to watch the SCorp v LLC video because they still confuse me.
Thank you for the example and WOW amaing graphics! ...is it possible for my Single Member LLC S-Corp to cover some expenses as a 'perk' of ownership in the company so long as the company is and remains adequately capitalized? Examples; company car, company insurance, ..etc. (you get the picture).
1.how much money do you need to make to be an s Corp
2.so if you made a million do they tax you on the million or after you minus expenses and dividends
3. Did you say you can be a single member on s Corp and pay yourself dividend
Owned buildings at another site may be used as alternate workspace if a building cannot be occupied. This depends upon the location of the building and whether the building would be affected by the same hazard that prevented use of the primary building. The alternate facility may be a viable business recovery strategy if the building can be configured with the required equipment or existing equipment can be configured to need business requirements.
Systems and Equipment.
Evaluate these systems to determine whether they meet the needs of the program. Identify and plan to overcome emergency communication system limitations such as weak radio or cellular service or areas where a warning system cannot be heard. Upgrading this critically important system may be required. Verify that these systems are in reliable working condition.
If fuel, battery backup power or batteries are required, make sure the system can run for the required time and chargers are available. Document how to operate these systems and mark the locations of controls. Make sure the information is available during an emergency. Many of these systems also require periodic inspection, testing and maintenance in accordance with national codes and standards. Train staff so a knowledgeable person is able to operate systems and equipment.
Materials and Supplies.
Be sure to compile a list of available resources using the Emergency Response Resource Requirements and Business Continuity Resource Requirements worksheets as a guide.
Preparing for an emergency, responding to an emergency, executing business recovery strategies and other activities require resources that come from outside the business. If there were a fire in the building, you would call the fire department. Contractors and vendors may be needed to prepare a facility for a forecast storm or to help repair and restore a building, systems or equipment following an incident.
The following external resources should be identified within plan documents. Include contact information to reach them during an emergency and any additional instructions within the preparedness plan.
Public Emergency Services.
Contractors and Vendors.