Time to fire my account, I've always had to pay SS taxes, Thanks Sky123987, can I get a refund for the self employment taxes I've paid over the years that you say I don't have to?
Don't think you can go back. Just incorporate and stop paying that tax. Technically w/ the LLC in order to avoid the self employment tax, you will have to have 2 members. So just say you own 99% and have your sister own 1%, then you don't have to buy her any xmas presents
I hate when people STOP tax discussion and say TALK TO A CPA. There is nothing wrong is chatting about tax topics.
LOL, either you misunderstood, or I communicated badly or both! I could offset the expenses I had with the 1099, I never did say how much expenses i HAD, as it reads....You must be reading between the lines as some ladies do. lol Once can offset that portion of expenses with there 1099's, : : ) I do not deal with a 1099 now other that my 1099 R.
First of all, this thread may have misfired, since the OP is probably talking something like a 1099 MISC INT or DIV Then is was assumed he was talking about a 1099, such as compenation for an independent contractor. That said, an LLC has nothing to do with that issue, as an LLC is "a legal entity where income "flows through" to investors or owners, that is the income of the entity is treated as the income of the investors or owners" In other words, LLC members get a K-1, and must report the income on their 1040. " and (LLC is required) to provide each owner with a statement of allocated income to enable owners to report their shares of income on their own tax returns. In the United States, the statement of allocated income is known as form K-1 (or Schedule K-1)." With income, SOMEONE pays each half of the self-employment tax. If an employee, usually your employer pays half. If a contractor or self-employed, you pay the FULL, aka "Self Employment Tax." I had an S corp, and you have absolutely no idea what you are talking about.
Very simple. Instead of the independent contractor being "you". Have it be the LLC. It's very simple an LLC doesn't pay self employment tax.
Does not work that way. The income is distributed to the owners, it cannot stay in the L.L.C. It is INCOME, and the approx 15% tax must be paid. The owners are responsible, PERIOD. The income PASSES THROUGH to the members of the LLC and goes onto their tax returns, and sleight of hand only results in audits and heavy fines and penalties. Unless you have owned a limited liability, you really have no idea how it works. But you go ahead and float this by these people ---> IRS.gov and let us know how that works for you
Mr. TraderZone, One member LLCs are treated that way where they have pay self employment tax. Once you have > 1 member in the LLC YOU DON'T PAY SELF EMPLOYMENT TAX! - that is why you set it up where 1% of the profits of the LLC go to your sister. If you have an LLC, just add another member to the LLC to avoid the tax