The Small Business Tax Help Blog

Posts Tagged ‘llc’

Question: I joined a consulting firm organized as an LLC. It is charging me for out-of-state taxes. Should it?

I received 70% of what is billed for my services to the client – the LLC retains the balance for its overhead and general partners. If I didn’t work, or the client didn’t pay, I didn’t get paid. I left the firm, earlier this year due to lack of work – but now they’ve come back to me demanding I pay state taxes.

I performed services in Washington State for a client business situated in Washington and never left the state, but the LLC is insisting that I pay taxes on income from California, Georgia, New York, etc. The firm apparently has individuals providing similar services at other client businesses in other states, Apparently the firm’s tax preparer is trying to associate my earnings with those other states.

I paid self-employment and federal income taxes directly from what I received.

I received a K-1 and filed tax returns properly for federal purposes.

Washington has no income tax.

It seems wrong on multiple levels. What am I missing?

Answer: As a partner, you shared in the income of the firm–not just the money you brought in. Since some of that income is sourced to California, Georgia, etc, you owe taxes to each of those states.

The fact that Washington doesn’t tax you is moot.

IRS will audit more rental real estate returns

If you have real estate property that is rented, you should be aware that IRS has been urged to increase the examinations of rental real estate.

Ch. 2 IRS; LLC Tax

Question: New LLC. Create Another EIN?

I created an LLC with a partner. The EIN number was under my name.

Now, I created another LLC, with only myself as the owner. Should I obtain another EIN to open a company bank account?

Answer: Since they’re free, why not?

Really, though, you need a New EIN because the tax liability is different.

Since a LLC is still a corporation, the initial EIN provided simply provides a credible source. It doesn’t mean that the tax liabilities are exactly the same.

No two distinct legal entities should have the same EIN.

Dead or Alive Dimensions Shakes Up Nintendo World

Dead or Alive Dimensions (3DS) We try out the new take on the busty fighter and come back impressed… in 2D.

HOW TO ACQUIRE A EIN FOR YOUR NEW BUSINESS

Question: Business financing and initial costs–shoestring personal budget!?

OK. This is driving me crazy. I have an idea for a business, have my EIN but now need to apply to the state. I need to pay the state fees and advertising costs (state requires legal notices).

My question is, HOW to get this money, which is ver much under $1,000…….in fact, if I were to find seed money of $1K, I would be in good shape to start off.

WHERE TO FIND THIS MONEY WHEN I DON’T HAVE IT?

Answer: Hi, as far as your legal notice in the paper find one of the very small papers in town. I did mine in a little town paper and only paid 50 dollars and I am sure had I gone to the town paper it would have been alot more. Good luck to you.

My Prizes

A review, and links to other information about and reviews of My Prizes by Thomas Bernhard.

88 Color Palette: Cherry Blossoms

Question: Do you pay payroll taxes to partners in a California LLC?

There are four partners who work and all own a share of our California LLC. Do we pay taxes to the EDD for Payroll, or do we pay Self-Employment taxes at the end of the year, or do we do both?
Note: The four partners are the only employees of the LLC.

Answer: Members (what you refer to as “Partners”) of LLC’s are not considered employees, and thus do not pay payroll tax. Each member will be issued a K-1 at the end of the year w/ their share of the LLC’s income/loss which each member will report on their own individual income tax return.

The one thing to beware of is that LLC’s in CA have a tax that is calculated on gross receipts and not net income. If your gross receipts are greater than $5M, you will be taxed $11,700, regardless of whether you actually have any net income. So if you are in that situation, there may be other entity structures that would provide more tax efficiency.

Going into business with a foreign partner

To avoid adverse tax consequences, the owners of the LLC interest should be corporations.

Lawline.com Legal Tip of the Day: Advantages of an S Corporation

Question: Tax Question for an LLC?

I have a company that sells software online to fx traders in 2008?

Revenues: $ 74,952.00
Expenses: $ 13,123.66
Net Income: $ 61,828.34

What would the total tax be for a “single member LLC” in Illinois
Which includes federal, state, and self-employment taxes?
And any other taxes that I might be forgetting.

Thanks

Answer: You’ll need to file a separate return using your EIN. The LLC return should produce a K-1 form. You would pay your income tax showing the net proceeds from the K-1.
The rough estimate on the Fed portion of the LLC will be between 25-30% of your net income.

U.S. Economy: Manufacturing, Jobless Claims Point to Slowdown

Reports on U.S. manufacturing, employment and home sales pointed to slower growth in the second half of the year, just as government spending to stimulate the economy begins to wane.

Ch. 4 LLC & Self Employment Tax