How so? Thanks for the feedback! It's the name of our website, howtostartanllc.com.

That's great! Good luck and we'll look forward to hearing from you.

Thanks for the question! Shareholder distributions in an S corp can be paid by any normal payment method that a business owner might use in other situations -- like ACH transfer, Zelle, or check. The most important thing is that the payment be made from a dedicated business bank account. We've added this question to our "videos to make really soon list", thanks for commenting!

Yes, you can do that!

Thanks for the question! A person's name is the only business name that can be used legally if the business owner doesn't form a legal business entity like an LLC or register a DBA.

It could be. It's best to dissolve the LLC if you aren't using it. What state are you in? I can post instructions for dissolution.

Oh my gosh, yes! Thanks so much for pointing that out. Not sure how that came to be but we'll fix it right away.

@@HowtostartanllcOfficial Thanks for the reply! It was a fun video! I went with your Northwest link :)

That's great news. Thank you! And congrats on the new LLC.

That's great to hear. We have a new video coming out soon with instructions for starting an LLC in the US on your own, with very little expense. Essentially, the steps are as follows: - Start an LLC with Northwest Registered Agent (normally in Wyoming) for $29 plus the $100 state fee. This includes a free registered agent for a year and a business address (but mail forwarding is extra). Here's the link for that: go.truic.com/45hplKy. - Get an EIN by fax or phone, or use a service. I have directions I can give you for that. - Then, get a business account without coming to the US. We have a few recommendations based on your country. If this is something you are ready to do, I can provide the instructions for the steps, please let me know!

The question is -- what activities do the other states consider as "doing business". Each state is different. It's best to work with an attorney who specializes in business law but you could research this independently.

What additional states do you plan to work in?

What is the name of your LLC? And, what company helped you form your LLC?

What happened?

It depends on which state you plan to sell in. Here's a guide that will take you to the different states: howtostartanllc.com/business-license LegalZoom can help you as well: go.truic.com/3F4dPYf Good luck to you! At TRUiC, our mission is to offer free resources and information. We support our work by partnering with service providers, earning a percentage on some of the offers we’ve negotiated on your behalf. LegalZoom is one such partner.

The 60/40 rule is a quick rule of thumb to determine the split of compensation into salary and distributions. But in some situations, it may result in an S Corp owner paying more, rather than less, in employment taxes. It’s better to consider the factors we set out in the video, particularly how much you would need to pay someone to do the job you’re doing. Also, a CPA with a good understanding of S corp taxation would be able to determine what split would be optimal for tax savings while mitigating the risk of audit.

In regards to 1099 sales and ecommerce: This is a complex question because each state has unique business entity rules (governing limited liability) and tax regulations. So, depending on where you do business, you might need to file for a foreign LLC and pay income taxes. Some states also charge a sales tax for services. Crypto trading would be best covered by an LLC in your state. You will need an accountant or business attorney to guide you in your 1099 work and e-commerce. Some consultants only take work in certain states-- an accountant or business attorney could help you choose. Best of luck to you, and thanks again for the question. DISCLAIMER: Please note that the information provided by us is not, and it is not intended to, constitute legal advice or tax advice. For the most up-to-date legal advice, we advise deferring to a professional attorney or certified public accountant.

Very, very happy to help!

Distributions are taxable as income (capital gains income) in some situations. In the video we mention that S corp owner-employees don't pay self-employment taxes on distributions. Assuming your EA is well versed in S corp and your business's tax profile, it is reasonable to assume that paying off a mortgage with S corp distributions wouldn't be financially beneficial.

Yes, everything can be done online in Virginia, including filing the articles of organization. If you're comfortable doing it on your own, that's great and we support that 100%. You can ask us questions along the way if need be. I also want to let you know that Northwest Registered agent is a great choice if you don't feel comfortable with the paperwork or process. For $29 they will make sure everything is filed correctly and they will act as your registered agent for a year for free. They are also there to answer questions and they do that very, very well. It's a really good deal- I even used them to form my LLC. Here's a link: go.truic.com/45hplKy Best of luck to you! At TRUiC, our mission is to offer free resources and information. We support our work by partnering with service providers, earning a percentage on some of the offers we’ve negotiated on your behalf. Northwest is one such partner.

@HowtostartanllcOfficial thank you very much!

Thanks for watching, we're really happy to help! I've passed your suggestion on to our video production team :)

@@HowtostartanllcOfficial thanks for the reply. The one specific thing I still don’t understand about an S corp is, are we allowed to have say an investment account under that LLC where all the excess profits can accumulate? This would be after paying taxes, salaries, wages, expenses, distributions, etc.

Thanks for watching and you're very welcome. Yes, here's an excerpt from the IRS: 401(k) plan contributions If you are a common-law employee of the S corporation: -you can make salary deferral contributions to the 401(k) plan based on your Form W-2 compensation; and your employer can make matching or nonelective contributions to the plan based on your Form W-2 compensation as a common-law employee. -Salary deferral and employer contributions (matching and nonelective) are based on annual limits subject to cost-of-living adjustments. www.irs.gov/retirement-plans/retirement-plan-faqs-regarding-contributions-s-corporation Here's an example from the IRS: Ben, age 51, earned $50,000 in W-2 wages from his S Corporation in 2020. He deferred $19,500 in regular elective deferrals plus $6,500 in catch-up contributions to the 401(k) plan. His business contributed 25% of his compensation to the plan, $12,500. Total contributions to the plan for 2020 were $38,500. This is the maximum that can be contributed to the plan for Ben for 2019. www.irs.gov/retirement-plans/one-participant-401k-plans Do you have an accountant or are you DIY?

Most states have that information available online. You can use our LLC name search guide to get started. Just select your state and follow the instructions: howtostartanllc.com/llc-name-search Let us know if you need more help. And please include your state if you do.

Thanks for letting us know! We'll make sure that link gets added back in. Until then, here's a link to one of our favorite templates: www.northwestregisteredagent.com/wp-content/uploads/2022/03/Corporate-Bylaws-CA1.pdf

Thanks for the feedback and congrats on the new LLC!

Happy to help!

When an S Corp pays a working member a reasonable salary, it behaves like an employer and so must pay the employer portion of FICA taxes, which is 7.65% of the salary, plus the salary. The working member is treated as an employee, and so must pay the employee portion of FICA taxes, i.e. 7.65% of salary. So together, the S Corp and its shareholder pay FICA taxes of 15.3%. The S Corp must also pay FUTA tax. The good news is that paying those items reduces the S Corp's taxable income.

Yes, that’s correct. The entire 90k is subject to employment taxes, because the reasonable salary is $110k.

Hey there, thanks for the comment! You’re quite right. And also, there’s a little more to it. Profit (income) generated by an S Corp is “passed through” to the owner. “Passed through” does not mean the owner has received any funds. It simply means the owner will have to report that income as his own personal taxable income. The income is subject to income tax whether or not the owner actually receives any funds. But note that there is no requirement to take distributions if there is a profit. The funds can be left in the business, i.e. reinvested.

Unfortunately, under California law, all LLCs are required to annually file a California tax return and pay at least an $800 California franchise tax if they: -Engage in any transaction in California for the purpose of financial gain or profit. -Are incorporated or organized in California. -Have qualified or registered to do business in California. -Are “doing business” in California, whether or not they are incorporated, organized, qualified, or registered under California law. In general, it is very difficult to run a business or conduct business activities within the state of California as an LLC without paying fees and taxes. Even managing the business, i.e., making phone calls or using the Internet from CA, can be considered "doing business." The penalties for not paying are high. We would recommend consulting with a business attorney in your area. Please note that the information we provided is not, and is not intended to, constitute legal or tax advice. All content is exclusively provided for entertainment purposes. For the most up-to-date legal advice, we advise deferring to a professional attorney or certified public accountant.

It makes sense to wait for the LLC to be approved. That way, you know your business name is registered and approved before requesting the EIN. It's not easy to change the name of your LLC with the IRS if your LLC name isn't approved by the state.

This guy.....😂😂man...go start your LLC!

You probably need to find the employers EIN. If you search for "EIN lookup services" you will get a list of different ways to lookup an EIN. There are generally fees involved with the search.

Indeed! Google articles on Sec. 1368 (as usual with all things related to taxes … it depends!!!)

Great question!! You won’t see S Corp distributions on the 1040. The S Corp reports income in Box 1, Part III of Sch. K-1 1120-S. The amount of distributions is reported at Box 16, Part III Items Affecting Shareholder Basis. Distributions are reported because they affect stock basis and because they may be subject to capital gains tax if they exceed that basis, not because they incur income tax.

Glad it was helpful! Let us know if you need help with setting it up.

Hey there, you can change your LLC name in Wyoming by following an amendment to your articles of organization. Here's the form that you'll need to fill out and send in: sos.wyo.gov/Forms/Business/LLC/LLC-Amendment.pdf

Do you need help setting up your S corp?

Thanks so much for watching!

Hi, thanks for the question! You can take a look at this article: howtostartanllc.com/after-forming-llc And for LLC maintenance, please take a look at this article: howtostartanllc.com/delaware-llc#maintain Please let me know if you have any other questions!