Forming an LLC

[sotc]

Tax benefits as well

 

[treesmith]

How so, Willie?

 

[Husabud]

What about if you build a shop building and parking area and lease it to your business?

Good question. Maybe if you leased the property and building to a LLC.

 

[sotc]

First off you don't pay self employment tax which can be ridiculous, another benefit, You can elect to be taxed as an s Corp and not be double taxed like you would in a c Corp.

 

[lumberjack]

How do you not pay SE tax?

 

[Heg]

Just so happens I formed an S Corp via Legal Zoom with their $99 option a few weeks ago. Only took an hour of my time to answer the questionnaire. Total cost $283 which included the $100 Oregon file fee. I guess I gotta go back to see what the remaining $84 was for.
Not an LLC like you asked but just sayin' I had a good experience with LZ.

 

[sotc]

How do you not pay SE tax?

Because you become an employee, lower rate than self employment.

 

[Husabud]

But then don't you pay workers comp on yourself at an even higher rate?

 

[Tucker943]

I didn't think as an LLC, you are considered an employee.

 

[treesmith]

First off you don't pay self employment tax which can be ridiculous, another benefit, You can elect to be taxed as an s Corp and not be double taxed like you would in a c Corp.

But either way, you are liable for a certain amount of taxes, eh? Maybe you sidestep the SE, but the corporation has to pay taxes doesn't it? As to s corp vs. c corp...I don't know the difference, and willingly confess to being ignorant of such matters. But your business is what it is, regardless of how it's classed. I am me, whether I'm wearing a Smith shirt, a Rutherford shirt, or a plain camo shirt. (Not trying to be argumentative, Willie, I just think it's a shame that one cannot just go out and work and make a living without bureaucracy sitting above them like a vulture, waiting to devour their hard-earned money.)

 

[treesmith]

I have filed as sole-proprietor for the past 21 years. I'd have to do some digging to see if it would benefit me to go LLC or s corporation.

 

[squisher]

Atleast the way it is up here a 'company' or corporation is taxed at a lower rate than personal income tax. I think that's what Willie is on about. So you save money while lowering your personal exposure/liability somewhat.

 

[sotc]

I think part of the confusion here is that an llc can be set up many ways, mine is taxed as an S Corp, here's some info on that for those interested

http://www.activefilings.com/resour...ly-save-thousands-of-dollars-a-year-in-taxes/

 

[SouthSoundTree]

I have filed as sole-proprietor for the past 21 years. I'd have to do some digging to see if it would benefit me to go LLC or s corporation.

21 years of dodging bullets to your personal assets.
I can't speak to the tax benefits. My accountant assures me that it works better, and protects my assets. She set up my S-corp for a couple hundred. A laywer was going to be $1000.

 

[treesmith]

I fail to see how I'm dodging bullets, Sean.

 

[treecutterjr]

Because if something happens YOU are personally liable because your business IS YOU. Let's say something happened an accident that went into the big bucks or something. If you personally didn't have the money/coverage/ whatever; then they (The big bad Wolf) could go After your personal assets (home/personal bank acounts)etc.

Where as a llc separates you from your business. You are one entity And your business is is own separate entity.

Is basically just A big liability shield from business dealings whether that be accident, legal disputes, loan defaults, etc.

 

[MasterBlaster]

Welcome to the TreeHouse, brother! Gotta first name? Mine is Butch!

 

[treesmith]

I understand the idea of it...just disagree with the principle. Suppose a doctor's negligence causes a death. Nothing can be done, because he prudently "hid" all his assets. I believe the flaw is in the system.

 

[MasterBlaster]

But of course.

 

[SouthSoundTree]

Everything could go away as a result of a POS person trying to scam. Not your skills, Scott! Your lack of legal protection for your assets. It would just be terrible to see everything go away.

Fu&^*ng employees could be the end of it all, or a tire blow out that causes a big crash. Maybe you don't have employee liability.

 

[Tucker943]

You don't even need to be on a tree job to get your business sued and wiped off the map.

 

[BlackSmith]

Sometimes paying a lawyer is money well spent, sometimes.

 

[Bodean]

I second that.

 

[FireFighterZero]

The work I do for the volunteers for free or the State of Montana for money puts me, my family and my business in jeopardy. We should all have a million dollars PERSONAL liability MINIMUM IMHO.

 

[squisher]

Orrrr, just don't screw up.