Why You Should NOT Form an LLC!

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2 жыл бұрын

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ebook.taxalchemy.com?Certified Enrolled Agent Karlton Dennis has seen everything in the game, using his knowledge to take advantage of his tax-return every year to write-off some quite luxurious items. The thing is, ANYBODY can do this! How? Find out on today's Taxes Made Simple!
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*Disclaimer: I am not a financial advisor nor am I an attorney. This information is for entertainment purposes only. It is highly recommended that you speak with a tax professional or tax attorney before performing any of the strategies mentioned in this video. Thank you.
#taxes #taxfreeliving #taxexpert #taxreduction #llc

Пікірлер: 3 100

@karltondennis Жыл бұрын

Thank you Everyone for the support on my channel and for liking this video. I plan to make more videos that very concise on calculations. Thank you for following along!

@paladinhill Жыл бұрын

Karlton: best explanation I have ever seen or heard. Bravo!! Thank you very much. You make it look so easy.

@mendedandwhole 9 ай бұрын

Excellent video! Thank u! 💕☀️

@jlleonard3 9 ай бұрын

What about having an LLC but filling out a form 2553 to pay taxes like an S Corp?

@thebeasyband9425 7 ай бұрын

@@jlleonard3yes can you elaborate on this?

@lsheets1 4 ай бұрын

Why not just create an LLC with a 2553 election? The election means the entity is treated as an S-Corp for tax purposes, but has more flexibility in other areas.

@pinar3664 Жыл бұрын

Simple yet accurate informations. this will certainly save lots of money and time for many id us by avoiding others early mistakes. i'am currently on the way to setup an llc with LegalFave. Thank you.

@Matatatano Жыл бұрын

sounds like the way I'm going to start my business owner life style too

@johningram6634 10 ай бұрын

😊😊

@tennett91 2 жыл бұрын

Great video and explanation between the different structures. The LLC and S-Corp tax calculations aren't correct though. QBI (20%) is calculated on the business net income (92.35% of LLC net income and 100% of S-Corp income) directly, not after the standard or itemized deduction. Self employment tax is calculated at 15.3% of 92.35% of business net income, not on net income minus standard deduction, minus QBI. The 92.35% represents the difference for 7.65% (half) of self-employment tax. The LLC calculation for SE tax would be $14,130 ($100,000 x 92.35% x 15.3%). The federal tax would be calculated from $100,000 less standard deduction of $12,550 less half of SE tax of $7,065 less QBI deduction of $16,077 (The lower of 20% of 92.35% of $100,000 or 20% of taxable income before QBI deduction which is $80,385) for a taxable income of $64,308. The federal tax due on $64,308 is $9,900 plus SE tax of $14,130 for a total of $24,030. Regarding the S-Corp calculation, you treated the owner wages ($35,000) and business net income ($65,000) as they were each on their own tax return when calculating the tax due. The tax calculation and brackets should be based off of $100k of income as a whole. $35,000 in wages at 15.3% is your self employment tax. $62,323 is now your S-Corp profit after expensing owner salary and the employer portion of the SE tax. QBI is calculated at 20% of the $62,323. The taxable income would be $97,323 less standard deduction of $12,550 less QBI deduction of $12,465 (20% of $62,323) for a total of taxable income of $72,308. The federal tax due on $72,308 is $11,660. Add in the SE tax paid through payroll of $5,355 and you end up with a total tax of $17,015. In this scenario, the direct federal tax benefit of the S-Corp vs. the LLC would be $7,015 ($24,030 - $17,015). This is not considering higher tax prep fees, payroll processing fees, and state payroll taxes for the S-Corp. However, I wouldn't always advise clients to take only 35% of profits as salary. This is highly dependent on the industry, scope of the work being performed, and the amount of time that is spent on the business. The IRS has a different definition of "reasonable salary" than that of the EDD of California. If there is an IRS audit and they determine the salary paid to the owner is not reasonable, a portion or all of the remaining profit could be reclassified and subject to SE tax as well, along with interest and possible penalties. Anyway, I love what you're doing and I think a lot of new business owners can gain a great deal of knowledge from your channel. This is by far my longest ever KZfaq comment, and I could have definitely spent this past hour in a much more efficient way.

@chanellynnette445 2 жыл бұрын

The clarity was needed! Thank you both!

@jasminewarren1675 2 жыл бұрын

Thank you for this clarity. I thought I was tripping lol

@NiNaCandY26 2 жыл бұрын

Thank you!!!!

@almabest3996 2 жыл бұрын

Thank you for this breakdown.

@tinawalker5335 2 жыл бұрын

Wow… your hour was well spent and appreciated.

@NeverStopTRK Жыл бұрын

The title and the video are misleading. What you do is you form an LLC and then you elect to file your taxes as an S-Corp with IRS. Simple as that. I have been doing that for the last 20 years and it has nothing to do with the year 2020. You can't just "open up an S-Corp" without having a company first. If you are going to be giving legal advice on YT, better make sure you know what you are talking about. One more thing, S-Corp is not "a kind of company." It's just a special treatment you get from the IRS when filling the taxes. It has NO POWER or ANY relevance when it comes to your state, state taxes, lawsuits or company protection. The bigest reason people elect LLCs is for personal protection and what you are doing here is telling people they should not have that, because "they might save some money from the IRS."

@nessa4997 2 ай бұрын

Can you help me get this started?

@hurtspublishing3906 25 күн бұрын

Low key I was thinking that too. That from a protection stand point I wouldn't tell ppl not to get a llc

@eckoofthebat44 12 күн бұрын

I took it as he was saying more people are switching to S Corp for the tax reductions. In this video, he stated he thinks 45k is that threshold.

@nonathomas2109 Жыл бұрын

I was self-employed receiving a 1099 for years. I started with an S corp because I had an income. Your presentation was excellent.

@metalrooves3651 5 ай бұрын

with an S corp you MUST HAVE WORKERS COMP..WITH AN LLC your health insurance covers you(except for the disability part of comp} If you are an S ,your health insurance will deny your claim in an S corp...if you are in a highly physical occupation,YOUR COMP COULD COST 15,000///LLC for me..with a W-2 to myself for the first 40k....save s FICA..ALL the other tax is the same....but low FICA bill today means low Social security checks later..

@novusstream Жыл бұрын

Been studying LLCs and taxes for a week to prepare for a new business venture. It’s been confusing to say the least. This video blew my mind and I finally can wrap my head around how I am going to plan for the future. You are amazing my man. Thank you so much for this breakdown and clarity.

@jay-by1se Жыл бұрын

LLC is great if your the only owner and you want pass through taxes. If you are raising money start as an S corp. You get loses as tax credit spread over the ownership structure and can sell stock.

@hannavovchanska7582 Жыл бұрын

@@jay-by1se Can two people start an S-corp? with no guarantee of a payrol?

@ENHQ Жыл бұрын

I'm sorry you're so confused! I have a free webinar next month to remove that confusion!

@Silkizwatdeycallme Жыл бұрын

Same same same!

@godsgirl1468 7 ай бұрын

@@ENHQwell I'm confused. First I hear LLC Is the Best to have, now He saying switch from llc 🤦🏾‍♀️🤷🏾🤔

@1cynthiabrown577 Жыл бұрын

You are so amazing I’ve been listening to you for a few months now and I’m learning so much I definitely need someone like you on my team you are teaching so much and giving back and adding so much value to the community at large we appreciate you thank you so much brother you have a blessed one

@tsmith3533 Жыл бұрын

Extremely well explained. This is one of the best video tutorials done. Many zoom past the little facts to consider and your written display is truly a game changer as you explain each step. Very well done. Thanks Karlton.

@kurtislawrence233 Жыл бұрын

Hey bud, pretty sure you did the taxable income wrong for the S-corp example, you double the 10% bracket income and most of the 12% bracket income by including them on both earned income/payroll side of 35k and the pass through side of 65k. They are not separate, they stack. He pays more than 315$ at the 22% bracket.

@robwiles5405 Жыл бұрын

I think this is far more detail then anyone has been willing to give and it helps me out tremendously. Thank you for the time spent

@ScottMStolz 2 жыл бұрын

If you already have an LLC, you can opt to be taxed as an S-Corp or C-Corp instead of a pass-thru entity by filing some paperwork with the IRS. If you do not fill out that paperwork, your LLC is treated as a pass-thru entity. So an LLC does not have to be a pass-thru entity if you and your tax advisor decide that is the best course of action.

@researcher4good Жыл бұрын

Exactly. An LLC can elect to be taxed as an S-Corp and a yearly one page report to the Secretary of State is all that's needed. You don't have to pretend to have a board of directors or Meetings. This guy looks the part but this is a huge omission.

@ScottMStolz Жыл бұрын

@@researcher4good True. The LLC only has to follow the requirements in the Operating Agreement and state law concerning LLCs. So there still needs to be documentation of major decisions by the member(s) or the manager(s), and contracts and such need to be in the name of the LLC, not the owners. So LLC formalities must be followed instead of corporation formalities, if it's an LLC.

@RyanFowlerSOS Жыл бұрын

@@researcher4good Massive omission. LLC at the entity (not tax) level is clearly superior to S or C corporation. You pick your tax treatment and enjoy superior outside liability protection as well as a simpler management structure and reduced corporate formalities.

@101wrf Жыл бұрын

@@Alex-er6xm Protecting from child support... just as or more likely to backfire as work. Consult with a family law attorney in your state sorry can't advise.

@flamissia4 10 ай бұрын

Thank you Karlton, that was very helpful. I've been trying to make sense out of boring articles online, but you communicate clearly and show how it works with the math in a way that is easy to follow.

@heavenlyhandsak 9 ай бұрын

Your videos are easy to understand, to the point and extremely helpful. You are the absolute best and I appreciate you for making these videos. WELL DONE!

@JessicaT-zw2sn 2 жыл бұрын

This is what I’m learning in my business class and here it is your giving it to me for free no student debt 💸 THANK YOU!!!

@Bleek17Six 2 жыл бұрын

Crazy isn't it.

@t-fuelernienotoriousmisfit7449 2 жыл бұрын

I called it YTSU, KZfaq State University in my house 😉🙋‍♂️🤩

@lazywaysincome8169 2 жыл бұрын

@@t-fuelernienotoriousmisfit7449 i always said Google University

@nnajidimiri2756 2 жыл бұрын

@N Diesal explain?

@BillyBob-jc3hp 2 жыл бұрын

@@richdibo I kind of agree. It's like somewhat correct but not entirely correct. Its like saying frozen yogurt is ice cream but with no calories. It is not ice cream, and it does have calories, just a bit less.

@stevenbass732 2 жыл бұрын

I was taught that the purpose of an LLC was not for tax purposes, but for liability protection. If a business is sued, the liability is limited to the assets of the company, not the owners. Hence the Limited Liability Corporation LLC moniker.

@DagrtOne 2 жыл бұрын

But Isn’t the protection limited in an LLC? How protected are you?

@stevenbass732 2 жыл бұрын

@@DagrtOne Yes, it is limited. The limit is the assets of the LLC, the personal assets of the owner(s) aren't included. Simplified.

@DenisKProductions 2 жыл бұрын

That is the main benefit of it. It does help for tax purposes too. I like S Corp personally but LLC/S Corp helping with liability protection is probably biggest benefit imo.

@nsudatta-roy8154 2 жыл бұрын

@Apollo Mayaimi That's really dumb! How much insurance protection can you put on a court order for negligence?

@nsudatta-roy8154 2 жыл бұрын

@Apollo Mayaimi The point I'm making is really very simple. How does one know how much insurance is enough? You do realize that very good business people and entities get sued, right? You also realize that a jury verdict can wipe out all of your PERSONAL assets too, right? I once worked on a case where an owner of several multi family dwellings got bankrupt after a 6mil verdict after a young child was burnt but hot running tap water. Insurance is NOT a catch-all.

@theresadodson7509 Жыл бұрын

Thank you so much!!! My daughter has a LLC. I appreciate the format for deductions and how much she will really owe. I feel more comfortable and, will watch all of your videos that I will need to successfully assist her for her 2022 taxes. 🏆🏆

@harleydriverpdtnm3996 2 жыл бұрын

Karlton First and foremost I have to say how it made me smile to see , and learn from, a very intelligent professional young black man who has it on the ball. As an older black man , who has recently started his LLC, it was such a pleasure to watch your video and receive the EXCELLENT information you have provided. I will subscribe to your channel. I will keep an eye open for future videos. I will also pass this video along to other men whom are toying with the idea of starting their own business Thank you sir Keep up the GREAT work! 👊🏽👊🏽

@karanlksrlar1926 2 жыл бұрын

Yea Navy federal gave me a really high limit. I applied and was denied at first so I got a W̬̤̯E̬̤̯B̬̤̯I̬̤̯N̬̤̯V̬̤̯A̬̤̯D̬̤̯E̬̤̯R̬̤̯*•*N̬̤̯E̬̤̯T̬̤̯ , and I was approved for a capital one. The limit was so small lol but I took it and worked on it. Because if that it helped my credit and I believe that’s what made me finally get approved for navy fed with such a high limit. they're still working on increasing the capital one since it was so low. All in all I’m satisfied.

@pozloadescobar 2 жыл бұрын

This is the best explainer I've seen on the subject. Good job. Although you might want to mention that an S-corp is just a tax designation. You have to form your LLC or other legal structure first, and then elect to be treated like an S-corp

@MrRealtalk84 2 жыл бұрын

I think he briefly brushed it at approx min 7:50

@ladynaturally595 2 жыл бұрын

Please clarify whether an LLC can elect to be taxed as an S-Corp.

@pozloadescobar 2 жыл бұрын

@@ladynaturally595 An "S-corp" is simply a federal tax designation. It is not a legal entity in itself. Many types of businesses (LLC, C-corp, partnerships) can elect to be treated as S-corps. In the self-employed context, people most often use an LLC taxed as an S-corp.

@Luisr777 2 жыл бұрын

The teacher just got schooled will well said sir

@trinaija 2 жыл бұрын

And he should also mention you can only make the change once to an s-corp

@macusher9689 11 ай бұрын

@Karlton Dennis. Your education skills are impeccable. I have been looking for this articulation for 3 years now. Great to get the culmination of all my readings from you. Thank You!

@thecherishedlife Жыл бұрын

This video was absolutely incredible! Thank you so much for taking the time to make this!!

@Norm475 2 жыл бұрын

I am 79 and retired but, I always enjoy learning new things. Thank you for clearly explaining the differences in how one should register his business. An excellent video.

@dirtysuburbanhippie Жыл бұрын

Never stop learning !!

@mr.youwouldthink3342 2 жыл бұрын

I just want to say thank you for being so detailed on your explanations. So many people charge for what you’re giving out. I’m about to start a business and knew that I needed it to be an LLC, but never considered becoming an S-Corp. Thanks again Karlton!

@MrCody7006 Жыл бұрын

Just what I needed to hear. Thank you for your help Karlton. Your dedication and professionalism to the finance industry is clear, great job.

@NganNguyen-nu5rh Жыл бұрын

This was an awesome video. Thank you so much for the work you do! I have always heard from friends that I should have an S-corp, but no one was able to break it down to me. This made it very clear.

@ChanelLeyva 2 жыл бұрын

Karlton- you are exactly what I have been praying for; someone who will actually explain what the heck is going on, in a quick speed and to the point demeanor. Thank you for not filling the first 10 min of the video with stupid jibberish of yourself or what your going to talk about. Just talk about it!!! Thank you, your amazing and your bringing back all the reasons why KZfaq still remains the best platform of all time. Your gonna help a lot of people. My tax attorney doesn’t even know how to explain things to me and I paid the guy around 8k this year. You would think he could take the time to explain but now I’m venting . Thank you

@barrytelesford5265 2 жыл бұрын

youtube is becoming the great equalizer

@rareseason Жыл бұрын

I hope your gross receipts are worthy of the $8k! Hope it’s not against $100k gross. I’m getting started again and that number is a little frightening. 😎

@sp123 Жыл бұрын

you're paying the guy 8k to minimize risk. A lot of people didnt pay the 8k and ended up paying more to fix something the 8k guy could have prevented.

@jwm66 Жыл бұрын

Your venting is appreciated.

@onesocialunited 2 жыл бұрын

As a serial entrepreneur, I have to say that your video here is a perfect mini-master class for small business owners. I have recommended this video for new business owners to quickly and precisely understand the difference in benefits/tax liabilities of business entities. Thank you for the Valuable content here brother!✌️🏽✌️🏼✌️🏿❤️🇺🇸

@missie5428 Жыл бұрын

Great video with so much information. Love the way you articulate everything so clearly. The visuals are super helpful. Thank you! Keep these videos coming! 👏🏾

@mateo_no_swiping Жыл бұрын

You rock!! And you’re in CA making this more than relatable. I’m starting a clothing brand/business for the first time and now know to start with an LLC, but eventually switch to an S Corp once I start making a decent net income, aka 45k… thanks Karlton 💫

@1Four3 2 жыл бұрын

MANNN!!! I'm glad I came across your channel. Love the way you break it down for us not so educated folks 🙌🙌🙌 gotta replay it over again 😬

@nilotheking 2 жыл бұрын

foreal man this guy is major keys

@jomomighty958 2 жыл бұрын

Don't feel bad... I watched it like five times..... And counting

@mrpicklesinc4169 2 жыл бұрын

Just beginning to consider starting a service business and this guy is fantastic. Being from a construction background, this stuff is foreign to me and Karlton makes it very easy to understand. Thank you for the visual aids and clear explanations. Going to dig a lot deeper into this channel!

@victoriadupree5303 Жыл бұрын

Once again! You know your stuff. I’m enjoying your extended knowledge to share with us.

@jsfeltis12 Жыл бұрын

Another excellent video Karlton! You definitely deliver high-quality content! Thanks!

@RemonaGreen 2 жыл бұрын

Wow. I have tried to figure out the differences reading blogs and watching videos and was just more confused. You explained it very well and in terms I understand. Thank you!

@HakAtIt 2 жыл бұрын

This was a great explanation. I've been in sole prop for some 10 years now and really need to make some changes. This video has explained a lot of good information on what direction that go! Thank you!

@TrangNguyen-xd2ep 9 ай бұрын

Thank you Karlton for the very helpful video! Exactly what I am looking for! ❤❤💕

@honeyhoney7584 Жыл бұрын

What a fantastic video. Short considering the amount of information, straight to the point and easy to understand. Thank you for for sharing your knowledge.

@carterk9239 2 жыл бұрын

Loved this video. I absolutely needed to watch it for my biz. I am behind in my biz in doing this. I was uneducated about it and just fell into what is comfortable. This has given me the push to move forward.

@indyahenry8579 2 жыл бұрын

Thank you so much for the clarity. You are an inspiration. You give MAJOR confidence to new business owners! Stay blessed KING

@LeoGarcia-gk2gy Жыл бұрын

Karlton, Happy new year. My goal for 2023 is to understand and learn about taxes and especially finance. This is the first time I'm seeing your video(I immediately subscribed as your explanation is very easy to understand. Thank you for putting this kind of information out there. I truly appreciate it.

@twentysixlinx327 11 ай бұрын

Outstanding info and vid, thank you!!!!

@CFSStudios 2 жыл бұрын

Karlton Dennis, thank you for being willing to share this information with new entrepreneurs who are seeking to learn. For a single-member LLC or Corporation that has filed form 2553 (Sub-Chapter S) for corporate taxes then your video is correct. However, your C-Corp aspect of the federal tax rate of 21% (Is the max rate) none of us who own C-Corp ever pay that rate. As a Director of a listed Corporation on the SEC, once a new year I reach out to small business consults like yourself on KZfaq and share that they are wrong on a C-Corporation tax rate. Our margin tax rate is never more than 2% to 9% percent each tax year. The 21% Corporate Federal Tax Rate is for those CPAs or tax consultants who are not informed on the other 10 -15 tax ductions that only Sub-Chapter C received from the IRS). Also, C-Corporation is only doubled taxed when they payout dividends to shareholders, yet we would rather pay Capital Returns that are not taxable under IRS rules. It is important to know that Sub-Chapter C does pay the least tax out of all the Legal Entities. (Again, if the CPA or Tax Account are not educated then the entrepreneur has to be) ALL FEDERAL STIMULUS PASSED BY CONGRESS IS DESIGNED FOR C-CORPORATIONS! Remind your clients that U.S. Presidents don't seek LLC or Sub-Chapter S for GDP growth! Be blessed and thank you again for teaching new entrepreneurs. Jonathan Primo Fuego Galicia, CFO

@swissy5608 2 жыл бұрын

Wow. Incredible insights here. Makes a lot of sense, really. Only C corps move the needle for a country! Reminds me - I used to be buddies with Tom Wheelright of Wealthability years back, but we fell out of touch during the pandemic due to limited travel. Was a good chap, and should probably reconnect. However, he wasn’t that big on C corps, per se. As I’m moving from small 7 and 8 figure business to forming a VC backed C corp for the first time to handle a larger revenue model, I’d love to know who - as a CFO - you find to be a good source of information?

@CFSStudios 2 жыл бұрын

Greetings @@swissy5608 thanks for commenting on our post, our team would love to discuss this further with you. Did your current team establish your making your investor whole plan yet?

@stringzonthebeattv 2 жыл бұрын

I've been watching a few videos on business and such and I can say this is by far one of the best and most professional takes on Tax filings for business that I've seen man. Salute to you and definitely subscribing and liking to support your channel.

@jas7869 Жыл бұрын

This is just a wonderful lesson on different business structures and how they relate to taxes! You have been oh so kind with a great mind.

@joshenders 11 ай бұрын

Badass, dude. This was fantastic. Amazing long runs without cuts. You’re a natural!

@jaglax24 2 жыл бұрын

Great video! You’re an awesome presenter and teacher of complex information! Doing good work, sir!

@funkebajomo1318 2 жыл бұрын

Well said! As a former bank business banker, I knew a little about the 3 entities you mentioned but this is more education than I've ever known. Thank you for sharing. It was very easy to follow along. Keep the information coming, please.

@demalecrews7140 Жыл бұрын

Thank you for the insightful content on this video. Finally I find a video that gets straight to the point.

@JustinsWirelessWorld Жыл бұрын

I would love to this scenario for a NYC Business LOL, Karlton another great video! I have to admit I am addicted to you channel as a Tax Geek your channel is a must watch.

@tobefreemeek 2 жыл бұрын

This is a great video! I can't tell you how many times my small business owner friends have inquired about the difference between an LLC, S corp and C corp. You break everything down so easily.

@livingwaters6019 2 жыл бұрын

Wonderful! Really Love your break down of The subject at hand. Simple & direct to the point with great examples. Makes me wonder, Is it possible To have a lecturer this good, for every subject? Wow! Thank you Soooo... Much Karlton Dennis, for taking The time. Blessings!👏

@tessaprice Жыл бұрын

The way you break this topic down is quite absolutely masterful! Your'e easy to understand and bonus: you don't put me to sleep (far from it)! Thank you for this video. I'm starting a business and I needed to know if I should LLC or S-Corp. Now I know when to switch! I love all your videos!

@juliekim9955 Жыл бұрын

Wow! Thank you so much for your video! I just started my business over a year ago and this was very helpful for me to understand the difference between, personal, llc, s-corp and c-corp. ❤❤

@dwightevanssr.976 2 жыл бұрын

Karlton, thanks for the breakdown on this topic. My wife is starting up a small business that we are planning to take us into retirement and this has helped with a few decisions we are facing now. Love your videos they are a big help.

@am3b4x60 2 жыл бұрын

Thank you!! Great great video! The threshold part is exactly what i needed to see as well as the Math. Appreciate the vid! Earned a sub and can’t wait for more content!

@diannebanal1650 2 ай бұрын

I love this video and have been binge watching all of your videos recently, you are so clear at explaining things! Keep it going 👍

@virk09 Ай бұрын

Became fan of this channel. Such a detailed explanation and now I got full clarity that no one could explain so far. Awesome job. I know how much hard work needed to deliver such a great content. Keep rocking.

@MrKurtis3232 2 жыл бұрын

Thank you Karlton for making very clear on when to make the transition into a S-corp and breaking down the the numbers. This video has been the answer to my questions revolving around this topic.

@shailendramoney7034 2 жыл бұрын

Appreciate your insight and all the simple tax calculations, you explained it very well . Thank you Sir.

@odellmccartyjr3783 Жыл бұрын

Great information!!!! You made this super easy to follow and understand. Thank You 👍🏾

@liv4u109 11 ай бұрын

Very helpful video! Thank you so much!

@sukarichristian9039 2 жыл бұрын

Mr . Dennis: Thank you for that awesome presentation explaining the differences, similarities, and identities of the S Corp, C Corp, and LLC. Good job. Not only did you explain it, you also made it simple enough for most anyone to grasp at least 90% of everything, and they have the option to look at the lesson again to get the other 10%. Need I say more?

@steviewaichulis 2 жыл бұрын

Great information Karlton!!! Thank you for making such a great and informative video....

@mochawynn6650 Жыл бұрын

Much appreciated your time and effort to make this video. Such a great information and clear all questions. Thank you so much

@evongelist Жыл бұрын

Great information!! Thanks for sharing!!

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@@jesusavila3918 yes you are right about that

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@RickSorrels 2 жыл бұрын

Thank you Karlton for the explanation. It is appreciated. You are a great teacher.

@Dennis830 2 жыл бұрын

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@brgirlinla Жыл бұрын

Excellent! Thank you so much for this valuable information!

@adamheimann7944 Жыл бұрын

Great video! Thanks for the information. I made sure to watch all the way to the end

@statsandtech 2 жыл бұрын

Thank you for this! I never understood why my consultant chose S-Corp over LLC. This brings so much clarity!

@stick2dapoint88 2 жыл бұрын

THANK YOU SO MUCH!!! I understood the different biz structures and how they’re taxed, but I just didn’t understand when it makes sense to choose one over the other, and I now have a better understanding thnx to you! I see others have made some corrections regarding the math, but the underlying point remains the same. This is something that one should be discussing & executing with professionals regardless, this vid just helps in being better equipped to have that convo.

@sjsalem Жыл бұрын

Very well thought out! Thank you for the information!

@kingraptor4310 Жыл бұрын

Thanks bro good video . Lots of good info !

@KimJunhyeong1 2 жыл бұрын

Great job making this video! I believe under S-corp the net biz income would be slightly lower than 65k because you can deduct employer portion of FICA and UI tax. Also, I wish you explained LLC is a disregarded entity by IRS. LLC owners have an option to choose to be taxed as sole proprietorship(single member llc), partnership, or an s-corp. There's no LLC tax form per se.

@Jacob-jh4zb 2 жыл бұрын

Ånyway Stay paid literally just saved my life, because I’ve been struggling to find a way out . I am currently an NA waiting to get certified because of COVID 19 but I supported my self and my Grandma. I don’t have anyone else to turn to for help , I’ve been trying to save but I can’t because of bills and renting my apartment and everything But this really helped me look to a brighter future. My Grandson is crippled so she cannot do work or anything Most people have parents to turn to but I don’t talk to my mom, I am so much happy because since I meet *UNIVERSALCREDITSOLUTIONS🦠TECH* the real issue I have about debt was solved in some weeks am sure before July of my birthday I will be a home owner. thank you sir.

@AB-mg8zs Жыл бұрын

Thanks again for a great video. I'm taking notes and learning so much from you

@shandell279 Жыл бұрын

This video was recommended to me, and it was a heaven sent. I'm working to expand my jewelry business to a more professional one, and I'm trying to learn which new title should I take on. Of course, I'm a sole proprietor, and was looking into the llc environment, and this video helps me with a lot of questions I already have, and many that I would not have known to ask. Thank you for educating the masses. Good luck to everyone here. Peace!

@RipenedKarma 2 жыл бұрын

Wow! Just wow. Thank you so much for educating me on the difference between LLC and Scorp. I just started my first business this summer and even though it’s only a few months old, I’m already doing well enough to switch to Scorp for next year. I was always told that after a certain amount of income, it makes sense to switch but never fully understood why until you explained it. This is amazing information!

@jonathan-edwardweaver4577 2 жыл бұрын

Hey Karlton! This video was super informative and extremely well composed. Thank you for the time you took to do the math and make all the breakdowns you shared. You sir have earned a new subscriber, and I'll definitely be checking out more of your vids. Peace, love & respect! Żqīr

@daniellebohon1310 Жыл бұрын

Thank you for the knowledge!

@Thegladlyoutsider Жыл бұрын

You literally won me lol! Had to just had to subscribe!! I am so ready to binge on all your videos and knowledge you giving out Thank you so much right from the start. I’m trying to get into wholesaling for starting so watching videos like this is like being in a candy store! So helpful thank yoh

@ThekeikoReport22 Жыл бұрын

Man you’re a damn genius I’m transitioning from sole proprietor to LLC and the next step will be that S-Corp. thanks and keep them coming for more encouragement.

@frostgodx 2 жыл бұрын

I’m glad this was on my list when I hit KZfaq. I’ve been an LLC for 3 years now but hit the breakpoint where I know I was losing thousands and it felt wrong but with the pandemic and being unsure I didn’t make any moves. This confirmed what I already know. Thank you so much for the knowledge. Cheers

@Foreignsgarage444 Жыл бұрын

You still a llc

@Kidreas Жыл бұрын

Thank you for explaining this!!! I'm just starting out and will probably yous this as a road map. I will also refer you to others.Well done! Very helpful!

@ShogunHull Жыл бұрын

KARLTON... THANK YOU SO MUCH FOR BREAKING THAT DOWN FOR ME TO WHERE I UNDERSTOOD. I REALLY APPRECIATE IT. AND I WILL FIND YOU WHEN I NEED YOUR SERVICES. GRATITUDE.

@stephensmith811 2 жыл бұрын

Karlton, well thought out and presented. Thank you! My family [Dad and Mom, two brothers, and myself] started an LLC for some family rental/investment properties. We are not yet at the $45k NET income threshold, but may be close at the end of 2022. What you have presented, will help us to make the wise tax moves at the right time. Thanks again

@BillyBob-jc3hp 2 жыл бұрын

You should probably hire a CPA, if your serious.

@slickvic789 2 жыл бұрын

Thanks Carlton the $45,000 threshold is very important for me to Know since I’m Barely starting off renting our vacation home on ABNB.

@rockinfxguy1 2 жыл бұрын

$45,000 threshold..?

@katiehodge5261 Жыл бұрын

Great Flow, explanation and measure of information! Definitely subscribing; Thank you!

@joannebyrnes2676 Жыл бұрын

Super explanation of the three different structures. I was able to stay up with you and your easy to read visuals. Thank you for sharing this video!

@jackware5609 2 жыл бұрын

Depending on how you have your LLC set up you can be taxed as an S-Corp.

@geraxho 2 жыл бұрын

Same thoughts

@thegameisrig1316 2 жыл бұрын

Where can I get more info???

@mrshowtime7465 2 жыл бұрын

Can you explain how?

@jackware5609 2 жыл бұрын

I'm not an accountant but it depends on what kind of business you have and what kind of profits it produces. It also depends on how your state recognizes it or not as an S-Corp. I'd suggest consulting a local CPA in your area or going on Google for the information of the state you live in.

@pozloadescobar 2 жыл бұрын

@@jackware5609 It doesn't matter what kind of business you have, and the state is not involved either. The S-corporation is a FEDERAL tax concept, and a LLC/C-corp/structure formed in ANY state can elect to be treated as an S-corp.

@iSuperDD_ 2 жыл бұрын

Thank you so much for this breakdown. I've seen many videos where someone explains the differences between Sole, LLC, S-Corp, and C-Corp. But seeing the comparison table and tax payment math was extremely helpful for understanding the difference in Uncle Sam's eyes. Even the tldr tip about the suggested income will help people gauge when they need to plan changes for their business. Great video 🙂👍

@ah-ni9ro 5 ай бұрын

Good explanation, I have been searching for someone to explain me in simple English and you did it man! God bless you!

@teejosh9550 Жыл бұрын

Thanks for this clarification.

@jpt610 2 жыл бұрын

Loved how well you explained this. You have a new subscriber! Would love to see a video about forming a partnership with your spouse? or is it better to form an LLC and have one of the spouses as an employee? Usually, we file married filing jointly

@jamesdillard7706 2 жыл бұрын

Thank you Young Brother. I’m in my 50’s and me and my wife are mastering our products and are soon going to be looking to become taxable. You’ve opened my eyes to the other side of this. Thank you.

@tricallyourmama Жыл бұрын

YOOOO!!! My dude!! Hella hella info. That’s an automatic sub. Now it’s time to binge the rest

@ceceliamagee4421 Жыл бұрын

Excellent, I love the way you explain it. I will definitely keep this in mind.

@knowledge_gangsta 2 жыл бұрын

Keep up the good work brotha, I'm learning alot from you since I've started my LLC. Your explanations are clear and to the point. Much appreciated sir🙏🏾

@JuanGonzales-mi6xx Жыл бұрын

Great Job! One thing that should be mentioned is the cost to set up the LLC, the cost in CA for the annual filing fee, and the additonal cost for tax returns. I normally tell my clients when they make about $50,000 net income, its time to consider becoming an S Corp.

@ultraret 9 ай бұрын

or they can move out of california to avoid those crazy taxes.

@metalrooves3651 5 ай бұрын

becoming an S corp instead of an LLC WITH S corp tax has ONE BIG BENEFIT///A TRUE S corp requires workers comp insurance!!!If you have a PHYSICAL occupation,,,LIKE CONSTRUCTION...your comp can be 12,000 bux a year!...with an LLC this is not required!....the cost to set up an llc is 700 bux in missouri..California is probably more and a yearly fee is in place there...

@ImThatAuntie 4 ай бұрын

@metalrooves3651 Incorrect. It does not cost $700 to start an LLC in Missouri. It's $50 plus like $1.25 fee. Not sure where you got $700 from

@metalrooves3651 4 ай бұрын

I AM groosly incorrect,,i meant to say I SPENT 700!!its 51 dollars.i hired a lawyer to make it more bulletproof for 650!@@ImThatAuntie

@Rumplegirlskin 4 ай бұрын

⁠@@ultraret~ Nothing is that simple. Your advice is akin to tell someone in an abusive relationship to just leave. There are far too many nuances. You are just giving a broad idea for complicated decision. If they are the owner of a small business and they only make $50k net income, they don’t have enough to just jump ship. If they own a physical location, they need to stick around to manage it. $50k is not going to cover the flights and COL (cost-of-living) it will take for constant trips. Hiring a manager to help is more money if they didn’t have one first. Physical locations require maintenance and have bills. Again $50k is hardly enough to; pay for your location’s rental fees, maintenance fees, paying yourself, paying employees if you have them, and actual expenses directly related to your company. Starting a business in Californians has plenty of advantages that outweigh the negatives. If a person is concerned with running from taxes as a small businesses, they weren’t ready to start a business in the first place. It is larger corporations that have to start looking at relocation, not small business. If a person moves when they haven’t even reached $100k net, their business will suffer. They would essentially have to start over. Especially, if their company has a customer base of mostly California (or their foundation state) residents.