Episode 76: How LLCs and Taxes Work Together

Episode 76: How LLCs and Taxes Work Together

 

Welcome to this episode of The Legal Paige Podcast. Now today's episode is all about business entities. Specifically, we're only going to be talking about LLCs and limited liability companies with the upcoming tax season, impending and looming over us. It's really not that scary.I promise! But the one thing to know is it's time to get your ducks in a row and learn more about how an LLC and taxes work together.

 

Things we talk about:

  • The basics like what is a Limited Liability Corporation or also referred to as an LLC. 

  • Why I call an LLC the best insurance for your business if you don't have insurance. 

  • How LLCs and taxes work together.

  • How it impacts your taxes and your personal tax return every year.

  • Why I always suggest business owners get and ensure that they are registered as an LLC in their state.


Here are a few quotes:

"The good thing here is your LLC isn't going to get double tax. So the LLC itself won't get taxed. You're just going to get taxed one time at the personal level. For LLCs though, just remember that you want to take all of your deductions. The Legal Paige has podcasts all about the tax deductions that you need to ensure your business is taking. So please go check out those episodes if you want more information on that."

 

"Now limited liability means of course it has liability protection. The bubble surrounding your LLC remains intact if you're not commingling funds. So there's this little protection around your business that for any risks or liabilities that could occur for disgruntled clients for any disputes, any lawsuits that could come up, if you have any negligence suits that are filed against your company, that all of the assets or the business are the only ones at risk."

 

"With an LLC, all of the profits and losses of the LLC, pass through the business to the LLC owners called members and those members then report this information on their personal tax returns. So the one thing to note here is LLCs are great because unlike a C corporation LLCs do not pay federal income taxes."

 

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