Existing Business Resources
Although tax season may seem barely upon us, the deadline for filing will approach quickly and businesses must be prepared. Members of a limited liability company face a slightly different tax requirement than other corporations
, as the IRS requires these types of businesses to pay self-employment taxes dependent upon a company's tax structure.
The IRS recognizes an LLC as a state-chartered business entity. LLCs are taxed either as a sole proprietorship, a partnership or a corporation. One loophole allowed by the IRS is the ability for an LLC to file as an S corporation. This lets shareholders pay self-employment taxes on only the salary that they take. However, if you are a sole proprietorship or file as a partnership, then you will be required to pay full self-employment taxes. You can expect to be taxed as a sole proprietorship if you are the only member of your LLC.
To prep for tax season, businesses ought to first consult with a certified public accountant prior to filing. A CPA can properly guide a business and help direct them on what deductions their company is eligible for. Although free programs such as TurboTax may seem like a viable option, but, particularly for small businesses, it can lead to trouble.
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