1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

Need Tax Advice

Discussion in 'Business & Tax Advice' started by gbmack, Apr 19, 2010.

  1. gbmack

    gbmack Power Member

    Joined:
    Apr 19, 2009
    Messages:
    705
    Likes Received:
    688
    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?
     
  2. thomansfel

    thomansfel Jr. VIP Jr. VIP

    Joined:
    Dec 11, 2009
    Messages:
    548
    Likes Received:
    170
    Occupation:
    working for myself
    Location:
    in a cave with WiFi
    depends on your business, best thing is individual, if you`re from US you can find info on wikipedia and IRS site
     
  3. heffe

    heffe Junior Member

    Joined:
    Apr 3, 2009
    Messages:
    147
    Likes Received:
    1,115
    Occupation:
    Internet Marketing- Consulting, Business Owning an
    Location:
    Costa Rica
    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.
     
  4. StutlerEx

    StutlerEx Newbie

    Joined:
    Mar 9, 2010
    Messages:
    17
    Likes Received:
    9
    Location:
    Atlanta, GA, USA
    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.
     
  5. Delboy2424

    Delboy2424 Regular Member

    Joined:
    Oct 3, 2009
    Messages:
    452
    Likes Received:
    123
    Occupation:
    Entrepreneur
    Location:
    Peckham
    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 ;)
     
  6. mattjay

    mattjay Junior Member

    Joined:
    Mar 12, 2009
    Messages:
    126
    Likes Received:
    16
    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 :D
     
  7. dias_161

    dias_161 Newbie

    Joined:
    Jan 19, 2010
    Messages:
    10
    Likes Received:
    1
    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?
     
  8. Delboy2424

    Delboy2424 Regular Member

    Joined:
    Oct 3, 2009
    Messages:
    452
    Likes Received:
    123
    Occupation:
    Entrepreneur
    Location:
    Peckham
     
  9. teeniegenie

    teeniegenie Supreme Member

    Joined:
    Aug 28, 2010
    Messages:
    1,295
    Likes Received:
    663
    Location:
    The Cool Part of Vegas
    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!
     
  10. BorisTipsIt

    BorisTipsIt Regular Member

    Joined:
    Aug 28, 2010
    Messages:
    207
    Likes Received:
    55
    Location:
    BorisLand
    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.