The Small Business Tax Help Blog

Posts Tagged ‘irs’

Question: Can an LLC pay another LLC?

My husband recently became an LLC (due to local tax law revisions), and his father, who owns the company that he used to be considered an independent contractor for, is paying him as an LLC himself. This is a family-owned masonry company. They have always been separate, paying for their own insurance, paying their own taxes, but now a new law states that they all have to be an LLC in order to work and get paid. The confusion lies in whether or not my father in law can still pay my husband what is owed for working hourly through him, or does he have to be paid directly from the homeowner? I hope this makes sense, please ask questions to help me clarify……

Answer: yes an llc can pay another llc

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Question: Corporation or LLC for RE Co & Why?

I’m opening up my own real estate company in Boston just me right now but might have a partner later on. Size will be considered fairly small probably 10 agents, couple of assistants and an office manager.

What should I do LLC or Corporation, and why?

On separate note, what do I do first file for EIN then LLC/Corp? or Vice Versa

Thanks in Advance for your Help.

Answer: Form an LLC. In most states its easier and has less regulation. It also gives you the same liability protection and allows you to file taxes easier.

The EIN comes after the LLC. You need to establish your LLC to ensure you can have the name you want, then get the EIN number and you might still need to provide your EIN to the sec of State

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Question: Can a business partner use my EIN to apply for credit ?

I use my own social when applying for a EIN for our joint business with my business partners. I just want to know whether my business partners can simply apply for credit without my approval ?
On paper the business belongs to all of us.

Answer: Yes, without a previously signed agreement to the contrary, your business partner is technically “allowed” to apply for credit without your approval – however, they probably cannot actually do it without turning in a “fradulent” credit application. This is because almost all credit applications require the signature of ALL partners who own 20% or more of the company. If a partner were to fill in such a credit application but only list themselves and leave off of the application any other partner that owns 20% or more, then would have in fact turned in a fraudulent application.

The fact that you gave your social when you obtained the EIN doesn’t have anything to do with the use of the EIN – the EIN “belongs” to the company.

If you want to stop partners of yours from applying for credit on their own wtihout your permission, you should have an attorney draw up a partnership agreement that everyone signs that lays out the basic rules of what the partners have and don’t have the authority to do. This is a simple document that should cost you no more than $100-$150 to get drawn up.

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Question: Independent Contractor And Taxes?

I Know being an independent contractor that I do need to file taxes, question is, how do I go about doing this correctly?. If someone can give me a step by step process and a list of the forms I will need..it will be appreciated. I have used search engines to help answer some of my questions but their written very confusing.

TIA

Answer: 1040 and your 1099 form showing your income.

Listing of any tax payments you made.

www.irs.gov

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