Tax Benefits of LLC | LLC Taxes Explained by a CPA

Tax Benefits of LLC | LLC Taxes Explained by a CPA - How does a LLC save taxes?

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Here's the truth about LLC Tax Benefits & Advantages by a CPA.
Become a Tax Client: mycpacoach.com/tax-planning-s...
LLCs are by far the most popular entity type amongst small businesses.
But what exactly are the benefits of a LLC? How does it protect your business? And more importantly, what are the tax benefits of choosing a LLC over another entity?
The answers to these questions may influence the entity structure that you choose for your business, and… how much money you end up paying the IRS.
That's why in this episode, I’m going to explain all of the tax benefits related to LLCs.
Outline:
Intro: (0:00)
LLC Tax Loopholes: (1:15)
Tax Benefit #1 Pass-through Taxation: (2:18)
Tax Benefit #2 S-Corporation Election: (4:20)
Tax Benefit #3 Tax Write-Offs: (5:08)
Tax Benefit #4 Pass-through Tax Deductions: (6:00)
Tax Benefit #5 LLCs are Easy to Set-Up: (7:05)
Recap: (7:48)
Interested in talking with someone from our team? Sign up to get notified when we are accepting new clients here: lyfeaccounting.com/coming-soon/
Want to learn more about LLCs? Watch our LLC playlist: • The Best Business Enti...
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Disclaimer: The information provided in this video is for informational purposes only and is not meant to take the place of professional legal, accounting, or financial advice. If you have any legal questions about this video or the subjects discussed, or any other legal matter, you should consult with an attorney or tax professional in your jurisdiction (i.e. where you live).

Пікірлер: 275

@gianninurmamade186 2 жыл бұрын

You guys are the best, simplified, fast, and you include time stamps in the video. very educational and efficient. Bravo!

@LYFEAccounting 2 жыл бұрын

We're on a mission to be the best accounting/business channel on KZfaq :)

@TheNoise0808 2 жыл бұрын

@@LYFEAccounting What incentives would pay me better. by an electric car or by putting panels alone in the house?

@Joe-the-busy-cpa 2 жыл бұрын

I'm a CPA. I'm just gonna play this video for my clients that are starting up businesses. You explained it MUCH more fluidly than me, lol...

@Queeen_Tori 2 жыл бұрын

I share that sentiment Joe. They still won’t get it though 😂

@KeishaPicou 2 жыл бұрын

I’m not a CPA, but I do own a business support service. My clients watch all these videos.

@wh6201 2 жыл бұрын

Are you looking for clients? I am looking for a CPA. Reply with your info.

@cottontail7218 Жыл бұрын

If I want to dissolve my LLC, do I have to still pay the Annual Report? It's getting close to the due date.

@PaulDupreonegod007 2 жыл бұрын

As a fellow accountant, this is a simple to understand and clear explanation of LLCs. Keep up the good work!

@daveeeysworld 2 жыл бұрын

Great concise video. Covered a myriad of topics pertaining to an LLC, some I didn’t even think about. Very helpful. Keep up the great vids.

@LYFEAccounting 2 жыл бұрын

Thanks ☺️ we’re just getting started!

@Nov24thsFinest Жыл бұрын

Thank you! Your video was easy to understand and follow! I truly appreciate you taking the time to make this video!

@theswych 2 жыл бұрын

Thank you for making this subject understandable!

@ALDOELTA 2 жыл бұрын

Awesome explanation. Clear voice and easy to understand. Thanks much

@BlessitsJeff 3 жыл бұрын

Good stuff! Very informative, thanks.

@pharmalokd 2 жыл бұрын

Great vid! Very easy to follow and great explanations!

@imwealthyforit9766 2 жыл бұрын

Very well explained video. Thank you!

@janedo-re-mi2738 Жыл бұрын

This video was so well put together and informative.

@alwaysapplypressure2477 2 жыл бұрын

Excellent Experience Awesome Awakening Thank You I Subscribed

@Queeen_Tori 2 жыл бұрын

This is an amazing way to explain this.

@JeffSpicoli80 2 жыл бұрын

Thank you for posting a very easy way for all of us to understand. BTW, I subscribed.

@LYFEAccounting 2 жыл бұрын

Welcome aboard and thanks for the support.

@guy-stephaneamanzourethyao1631 3 жыл бұрын

Great video, My dude from GSU doing great things!

@sierraarreola5297 3 жыл бұрын

Go lopes lol

@DreamHousesProductions 2 жыл бұрын

Definitely helpful! Time to hit the books! Thank you!

@LYFEAccounting 2 жыл бұрын

You're welcome!

@glendineevans1467 3 жыл бұрын

Thanks for sharing this good info!

@LYFEAccounting 3 жыл бұрын

Thanks for watching

@randre83 2 жыл бұрын

Perfectly explained!

@briancarlisi2224 3 жыл бұрын

You do a great job in making mundane tax laws exciting to learn about. Thank you

@LYFEAccounting 3 жыл бұрын

I appreciate that!

@savelikeaprowithleah5157 3 жыл бұрын

Amazing Content! Thanks for sharing!

@LYFEAccounting 3 жыл бұрын

Our pleasure!

@michaelpachuilo6219 2 жыл бұрын

Wonderful video thank you!

@thinkandquestion1305 Жыл бұрын

You can be a great teacher :). You made things easy to understand. Thank you,

@behappy886 2 жыл бұрын

The best explanation!!

@abdulwali626 3 жыл бұрын

GM excellent video this CPA did a great job.

@LYFEAccounting 3 жыл бұрын

Hey, thanks!

@Professor_Finesser 3 жыл бұрын

Great info, straight to the point, very professional

@steakbeard 2 жыл бұрын

So helpful. Thanks

@BroDJTheWednesdayWord 3 жыл бұрын

Outstanding video well executed covered all of the basics 👌in an easy to understand fashion and covered the tax implications to a T!

@LYFEAccounting 3 жыл бұрын

Thank you so much 🙂

@1baddhoney 2 жыл бұрын

Good info! Just started my business but I’m a little misinformed on the tax aspects of it all

@LYFEAccounting 2 жыл бұрын

Keep watching our videos and you will be in good shape. We appreciate the support.

@evanserickson Жыл бұрын

Thank you for the info!

@jamiestumps6146 2 жыл бұрын

Thank you, concise info!

@LYFEAccounting 2 жыл бұрын

Glad it was helpful!

@malcolmgamble3298 2 жыл бұрын

Awesome video

@nstramental 2 жыл бұрын

Awesome stuff 🖖🏾🤓

@K5310 2 жыл бұрын

Hey, great video! I did not know about the 20% deduction law.... I am gonna have a word with my accountant...

@LYFEAccounting 2 жыл бұрын

You're not alone. We're about to release a video about that next week, please share it with your accountant

@g13mediaproductions 3 жыл бұрын

Great information and very informative

@LYFEAccounting 3 жыл бұрын

Glad you think so!

@nassirweaver2276 3 жыл бұрын

Awesome video !!

@LYFEAccounting 3 жыл бұрын

Glad you enjoyed it

@TRMR_Media Жыл бұрын

Great video.

@kevingars1 2 жыл бұрын

Can you explain pass through tax deductions better please. And what qualifies

@t47351 3 жыл бұрын

Very helpful thanks!

@LYFEAccounting 3 жыл бұрын

Glad it was helpful!

@LIQUIDCIRCUIT7788 2 жыл бұрын

Thanks For the information

@carlogambino8594 2 жыл бұрын

Good info thanks 👍

2 жыл бұрын

Gracias

@aja_6093 3 жыл бұрын

Thank you very informative

@slimrado1333 2 жыл бұрын

I'm really happy to view this tutorial❤️ , I love it on here and thanks to everyone on telegram Also thanks to@slimrado

@castelarfinance1043 3 жыл бұрын

Great info!! Subscribing !!

@LYFEAccounting 3 жыл бұрын

Thanks for the sub!

@Artinthefamily 3 жыл бұрын

Good information. Something to think about though, the music sounds like a heartrate machine in a hospital. I had to turn it off, making me nuts.

@sabbie7 Жыл бұрын

Great content

@djpham1 3 жыл бұрын

Thank you for the information

@LYFEAccounting 3 жыл бұрын

You bet!

@ntlhasinyefamily7093 2 жыл бұрын

Banks in Virginia have introduced a Minority Business Fund program. To qualify, start-ups must get Minority Business Enterprise Certification. Can a LLC be registered and MBE certification obtained at the same time from the Virginia Department of Small Business and Supplier Diversity ?

@mh05270802 3 жыл бұрын

Well done video.

@LYFEAccounting 3 жыл бұрын

Thanks for the visit, just curious, which part did you find most valuable?

@stevensettlesii8314 3 жыл бұрын

Great information

@LYFEAccounting 3 жыл бұрын

Thank you, Steven!

@JasonRennie 2 жыл бұрын

Bad C corp tax example. If you pay yourself W2 wages, those are expenses for the C corp, so they reduce the C corp income. The double taxation for C corps is generally via dividends which, if qualified, may be taxed on your personal income at a lower rate than "active" income. If all of your S corp income is "active", there's very little net difference between the C corp and S corp taxation structures. The S corp shines for non-active (captial gain) income which can be taxed (only once) at the long term capital gains rate (if these non-active profits are taken out at least a year after the capital is added to the LLC).

@alxghyu1844 2 жыл бұрын

Yeah I am appalled that he missed that. As a CPA....

@terrydoss6343 3 жыл бұрын

Very informative I’m just starting my home business and I’m on a fixed income at this point and have purchased some equipment and products to run the business but it’s a little challenging finding the help I need but what’s the best entity I should go with LLC or S-Corporation I also have my EIN number and my Business Authorization Certificate of Registration

@LYFEAccounting 3 жыл бұрын

Will you have any employees?

@jtcmlt1 2 жыл бұрын

S Corp is a tax status, not a business structure. LLC and C Corp are business structures.

@ItsDan123 3 жыл бұрын

In the pass through vs non pass through example why wouldn’t the owners w2 pay be an expense for the business, and therefore not taxed at the business entity level?

@jasonwinters7560 2 жыл бұрын

Wages are deducted on a C Corp. Not sure why he brought that up since it moves taxes from the 1120 to 1040. I expected him to bring up dividends since that creates double taxation.

@eiitalmansourcenter8501 3 жыл бұрын

Very affirmative thank you deeply I appreciate your efforts to share this. Can I establish LLC with my SSN instead of tax id number for LLC.. What's the benefit and disbenefit of doing so please..

@markskipper2199 3 жыл бұрын

If you will pay any employees, you will need a Federal I.D. Number.

@OctPSfever 3 жыл бұрын

Its simple to apply for LLC entity via IRS portal...You will be assigned to have Federal EIN#. SSN is for individual income tax

@ulikacelestino8321 3 жыл бұрын

It would be a good idea to define what an LLC is before saying much , otherwise its a nice video👍

@alieninstallation50 3 жыл бұрын

Thanks for the vid

@LYFEAccounting 3 жыл бұрын

You bet

@seanstandberry4082 3 жыл бұрын

A great entity for people just starting out

@ramzee2581 2 жыл бұрын

Excellent info as always Sherman, thanks !! My office is at home, and I drink cofre every morning: could I write off a capuchino machine ?

@LYFEAccounting 2 жыл бұрын

Thanks for watching, Ram. If it is ordinary and necessary for the business it can be written off.

@ramzee2581 2 жыл бұрын

@@LYFEAccounting thank you !! Have a great weekend

@familymoney805 3 жыл бұрын

great video, jus wonderin if I could get an opinion tho.. I got a newly started clothing brand and I was wondering how important is it for us to register the llc?

@LYFEAccounting 3 жыл бұрын

Very. We recommend registering any business you start.

@BraidsByPuffQueenKayla 2 жыл бұрын

I got an L.L.C last year because my oldest wanted to work. We filed taxes on the L.L.C this time . What is my part? I did personal taxes but do I do business taxes now since she filed ?

@Sofia-fc5nj 3 жыл бұрын

GREAT video 🔥🔥

@LYFEAccounting 3 жыл бұрын

Thanks! 😃

@themiddleclasstaxslave651 2 жыл бұрын

I clicked like video. LLC are legal tax loops holes, there I fixed it :)

@GregoryLemon-gf5ez Жыл бұрын

Thank you.

@voltairepabustan 3 жыл бұрын

Interesting example!

@LYFEAccounting 3 жыл бұрын

Glad you thought so

@twerkmixtapes8875 3 жыл бұрын

Appreciate it bro

@LYFEAccounting 3 жыл бұрын

Appreciate YOU for watching.

@ktrepairs Жыл бұрын

Is there a video to the Passive business owner LLC?

@steel0803254 3 жыл бұрын

Good info

@LYFEAccounting 3 жыл бұрын

Glad you think so!

@wendyx2489 2 жыл бұрын

Do you recommend for a new virtual assistant a llc or sole proprietor?

@Anibalm28 2 жыл бұрын

Excellent video , question can an lllc be created and work with crypto?

@LYFEAccounting 2 жыл бұрын

It can!

@cheriehughes7393 2 жыл бұрын

When I first started my business it was a sole proprietorship. I applied for an EIN number to pay sale taxes. I just switched over to an LLC. I applied for a new EIN number for the same company. How do I cancel or get rid of the old EIN number?

@vgsdomingo1 Жыл бұрын

You don't. The IRS cannot cancel your EIN. Once an EIN has been assigned to a business entity, it becomes the permanent Federal taxpayer identification number for that entity. Regardless of whether the EIN is ever used to file Federal tax returns, the EIN is never reused or reassigned to another business entity. The EIN will still belong to the business entity and can be used at a later date, should the need arise. If you receive an EIN but later determine you do not need the number (the new business never started up, for example), the IRS can close your business account.

@gimangipodestry8414 2 жыл бұрын

Question, i just created an llc for a new biz. Should i file an 8832?

@Abdellah.AB1 2 жыл бұрын

Is there any chance I could know which states to move to form an LLC (for affordable taxation) ? Great video tho 👊🏻

@MrJshsedgwick 2 жыл бұрын

Montana

@kwell2307 2 жыл бұрын

Don't need to move to generate an LLC. Just go thru a Registered Agent in that state.

@tangiebass1501 3 жыл бұрын

Request for you to create video vlog subject topic on Government pay people international travel to vacation with their business , Spoken by Shantel maxwell not tangie bass this is a shared channel with my mother

@cl1069 2 жыл бұрын

In your calculation for C corporation i wonder if i understands correctly. If your company make 100.000$ and pay you 40.000. Should your company be taxed on 60.000$ ? Instead of 100.000k ? So even you are taxed twice but your icome are devised into 2 smaller tax bracked. Would it be a benefit over pass-though tax ?

@dannyolivares6757 3 жыл бұрын

Excelent video, thumbs up!

@LYFEAccounting 3 жыл бұрын

Thank you! Cheers!

@Chrishm0 3 жыл бұрын

so your w2 income is not a deduction to your c corp?????

@castrodenavarrone 2 жыл бұрын

Pass through taxation benefits are at the state level or the federal level??

@yvonneanderson9867 Жыл бұрын

If the LLC owner deducts x amount money each month. Do they have to record the withdrawals on the Schedule C form or SE form?

@lostinmyspace4910 2 жыл бұрын

I don't own a C corp. business. BUT, doesn't that business C corp. get to deduct payroll expenses as a regular business expense (legal business deduction) in determining net profit? Please someone answer that question...thanks! In my S-corp. business I do deduct all W-2 expenses including the matching social security expenses, and SUTA and FUTA tax as a regular business deduction. Any profit on the S corp is reported on a K-1, then gets reported on the Schedule 5 for Supplemental income which in turn is reported on Form1040. I'm never double taxes an an S corp owner.

@hangbtran 3 жыл бұрын

Do Iwe have to pay tax every quarter,and we are the manager and sole owner no membership

@djsoda5699 4 ай бұрын

Can I start off as llc and later change to s corp for the tax benefit

@gregdavis3749 2 жыл бұрын

How much does it cost to setup LLC?

@randyali 3 жыл бұрын

Is that 20% QBI tax deductions passed with the Jobs Act a one-time deduction or eligible for businesses yearly?

@kristen3445 2 жыл бұрын

Yearly!

@leonardolilue2068 2 жыл бұрын

The LLC doesn't run business in the US, and the sole member is not resident. Does have to pay taxes in US? Thanks

@beatricecfranklin3854 2 жыл бұрын

Series LLC for apartment buildings?????

@dcmsr5141 3 жыл бұрын

I love the content. The reason I don't LLC is because as a sole proprietor, I want to see what is going to happen. Then and only then will I explore an LLC. Don't want to spend more than I have to. "Measure twice cut once."

@asj7732 3 жыл бұрын

Same here

@fastrivers812 2 жыл бұрын

Not sure I understand you on this. How wouldn't you be able to see what will happen in an LLC? You're still getting your cash, you're just reducing liability?

@amywantz2427 3 жыл бұрын

How does an LLC affect my filing taxes when filing with my spouse? They have a regular w-2 paying job. Right now we file married filing joint.

@OGGUN71 2 жыл бұрын

Lovvvveeeeet!!!!!

@wang1guhn 2 жыл бұрын

I created my LLC in July 2021as a single member. I wasn't aware that I had to file an ECE with the IRS and it had to be done within 75 days of formation until today! I was told that i don't want my LLC to be automatically classified as a Disregarded Entity. The problem is I'm not sure what classification I should elect. I would like to pay as little self employment tax as possible.

@luvchyld86 2 жыл бұрын

Did you ever figure this out? I’m in the same situation

@hubertschulz3027 2 жыл бұрын

@@luvchyld86 why can’t you write to mr James for a help he will help you with all you need you can invest with him for a better profit

@hubertschulz3027 2 жыл бұрын

①(⑨①⑥)⑧⑧④⓪⑤⑧④

@wang1guhn 2 жыл бұрын

@@luvchyld86I'm going to classify as a S Corp

@traceymeek1238 3 жыл бұрын

Um, the corporation gets to deduct the wages it pays you before it pays Corp tax. You're thinking of dividends.

@disco8863 10 ай бұрын

Love from India 🇮🇳

@godsees7903 3 жыл бұрын

Thanks

@LYFEAccounting 3 жыл бұрын

Welcome

@LIQUIDCIRCUIT7788 2 жыл бұрын

Does the IRS still consider Disregarded

@mamijojo6446 3 жыл бұрын

Where to start llc in California? I got varies offer from 800 usd to 3000 usd to set up.

@FoodShowFan 3 жыл бұрын

It doesn’t cost that much to get registered. Usually $25 to 125 depending on the state

@ItsDan123 3 жыл бұрын

@@FoodShowFan California is $800.

@MichelleWilliams-zk9sb 3 жыл бұрын

@@ItsDan123 thank you so much

@tvancleve 3 жыл бұрын

You were doing good up until the example of double taxation. A c corporation would be able to deduct the wages it pays to its owner, in most cases, and therefore the C Corp would only pay taxes on $60,000. If you had used the dividend as an example, then you would have been spot on.

@DrMathOfficial 2 жыл бұрын

What do you mean a c corp would only pay taxes up to 60,000? So what the c corp pays you (the owner) pays taxes only up to 60,000? And then all money paid to you beyond that is not taxed/ no taxes are taken from it?

@lonnylynn2409 2 жыл бұрын

Yeah Doc, I’m lost on that too. Thought the owner got 50,000 out of 100,000. I think money taken out prior to taxes would help except when paying employment tax of up to 40% and C Corp needed to pay health and welfare?

@tyregrinage7065 Жыл бұрын

I've a LLC and a FEIN Can you offer Some more info!

@GGE415 Жыл бұрын

How do I get a personalized tax program

@lilcs3011 2 жыл бұрын

How is it a loophole if it's the law?

@Johntrillaa 2 жыл бұрын

What about filling taxes with a music business LLC, can I write off almost everything

@LYFEAccounting 2 жыл бұрын

You can write off all reasonable and necessary expenses. You should check out our video on how to write-off almost anything!

@victorespino5650 3 жыл бұрын

That's exactly what I was going to say lol. There is a difference tho. You can put more purchases under the company, LLC, and have better record keeping that way and they're for be a little more aggressive in your write offs.

@realityblooms 3 жыл бұрын

@dglynn5088 2 жыл бұрын

Great video! Question…I am one of 3 owners (equal shares) of a small incorporated business. Our corporation has a brokerage account that has done very well. We’ve not paid ourselves any of the profits because we’ll have to pay corporate taxes, then personal. Is there a way to transfer the brokerage account to an LLC?