Need Tax Advice

If you're a sole proprietor, don't you have to pay like 40-50% in taxes?

But if you get an LLC, can it really reduce your taxes to about 20-30%?

Any tips?

depends on your business, best thing is individual, if you`re from US you can find info on wikipedia and IRS site

I had a bunch of tax questions too but didn't want to pay a CPA a ridiculous amount of money to find out the answers. After some searching I found a site called justanswer.com. Ask your question(s) there, a CPA will answer you, and you pay him $15 if the answer was to your satisfaction.

A single owner LLC is viewed as a pass-through entity by the IRS so you would be taxed the same as if you filed as a sole proprietor. Either way, you're paying self employment tax. In reality, you should only end up paying around 25%-35% in taxes with deductions.

Key area to remember - if you also have a "full time" job then you can "offset" any loss in your self employment against any taxes paid in your full time source deducted - thus reducing your liability of course if you are being legit about it

i didn't make a ton of money last year online, but agree with above post. i believe the minimum self employment tax is 25% BEFORE deductions. i ended up paying much less last tax time with internet, phone, office space write off, hosting, domains, other expesnes etc. however if you do outsoucring and this is an expesne, you have to tax form your outsourcers to be able to safely write that off. i personally don't worry about it. but i paid my CPA about $300 when it was all said and done and saved about 2.5 k or so from what we originally estimated. however like i said, i really didn't make a ton online last year. I know the more money you make the more you pay after certain levels.
hope that helps somone

25% MINIMUM? that's a hefty sum......but are you saying that by putting all ur expenses with expenses u pay less?....would "Avertising" be considered an expense?

gbmack said:

If you're a sole proprietor, don't you have to pay like 40-50% in taxes?

But if you get an LLC, can it really reduce your taxes to about 20-30%?

Any tips?

Click to expand...

This all depends on how much you gross, what expenses you have, where you live, and other factors. A LLC in and of itself will not magically reduce any taxes unless you are in the right situation. Here in Nevada I get that all the time from people in Calif who think if they have a NV LLC they are good to go with avoiding Calif state income taxes. Not true!

Single owner LLC is disregarded by the IRS. You file just like a sole proprietor. Helps you with liability protection, but no tax advantage. Spending an hour with a CPA is well worth the expense. For a couple hundred bucks, you can save thousands. You can even write-off their fee.