LLC Tax Preparation Services
As any San Diego CPA can tell you, setting up the right structure for your business is one of the first and most important decisions a business owner makes. Taxes are a large consideration in choosing a business structure, but the choice affects much more. It affects how business decisions are made, what liabilities the owner and business incurs, and what responsibilities each owner of the enterprise shares.
Limited Liability Corporations, or LLCs, provide many advantages. They are not the best choice for all situations, but for entrepreneurs who want to maintain control of their businesses while limiting personal liability, they are a great choice. Further, they allow the business owner to avoid double taxation, have fewer administrative tasks and paperwork, and provide profit distribution flexibility.
A CPA can set up an LLC, advise on the tax benefits, and manage and prepare business taxes. If you are starting a business in San Diego, contact Abbo Tax CPA, a San Diego CPA firm. We focus on assisting new business owners and entrepreneurs. A good accountant and professional tax preparation makes the difference between taking in large profits and struggling to manage expenses. Contact Abbo Tax CPA today.
Income Tax for an LLC:
An LLC or Limited Liability Company is an entity that can blend of both corporate structure and partnership. It is a legally formed company that can provide limited liability to the owner.
Due to its complexity, filing taxes for LLCs include the understanding and completion of several detailed IRS forms. The tax professionals at Abbo Tax CPA can help guide you through the process of filing taxes for your Limited Liability Company with our LLC Tax Preparation Services.
Benefits of an LLC
When a business has one owner, the owner often thinks that the business structure must be a sole proprietorship, but this is false. A solo owner can establish an LLC and, in many cases, should do so without delay. LLCs provide legal protection for the owner. Without establishing the LLC or a corporate structure, an owner’s personal assets are open to seizure to pay business debts. Imagine if the economy sunk and your business could no longer make end meet, requiring you to close the doors. Creditors could then come after your personal assets, such as your home, car, and savings, to pay business debts. Do not risk these terrible consequences. Contact Abbo Tax CPA to get your LLC established.
In addition to gaining the liability advantages, an LLC provides the business owner with continued freedom, just like with a sole proprietorship. Whereas a corporation requires board approval for many decisions and partnerships require partnership votes, an LLC can be structured so the owner remains a free-wheeling entrepreneur. If there is more than one owner, the LLC can also be structured as a partnership, with a partnership agreement governing decision making processes.
Though LLCs protect a business owner’s assets outside the business, it’s important to remember that any money the owner invests in the business remains exposed to liability from creditors and lawsuits under an LLC. Also, any debts that the owner personally guarantees or lawsuits arising from a lack of due care still affect the owner’s personal assets. To maximize liability protection, work with an accountant, who can structure both business and personal assets to maximize protection. Call Abbo Tax to talk to an expert San Diego CPA today.
LLCs carry huge tax benefits compared to corporations. The earnings from an LLC pass through the LLC without personal income tax being charged to the owner. LLC owners then pay tax through their personal tax returns. In contrast, the owners of corporations pay a double income tax. A corporation’s earnings are taxed as income, and then the owners must pay income tax again when they take dividends. The tax benefits of an LLC also apply to partnership LLCs and S corporations. For more information on the tax benefits of LLCs, contact a tax expert accountant at Abbo Tax!
Did you know that the new Tax Cut and Jobs Act allows LLC owners to deduct 20 percent of their business income through the 20-percent pass through deduction included in the act? For more information, contact Abbo Tax CPA today.
An LLC also allows for the owners to distribute profits according to their charter or partnership agreements. Corporations, on the other hand, must distribute profits according to ownership share amounts and capital contributions. In the case of an LLC, partners could, for example, agree to redistribute profits according to how much work each member agrees to put into maintaining daily operations. The allocations must, according to IRS regulations, correspond to a legitimate economic interest other than tax savings. For information on the tax implications and regulations regarding LLC profit distributions, contact Abbo Tax CPA.
Is an LLC the right choice?
An LLC isn’t the best for all situations. Profits of an LLC are subject to self-employment tax, which is equivalent to approximately 15 percent of net income. Business owners must also consider what LLC write offs are available to them. To make a determination of whether an LLC is the best option for your business, have an Abbo Tax CPA analyze your business and financial situation today.
The Bottom Line
Making a profit these days can be tough. With the high cost of operating a business and lots of competition, not to mention taxes, businesses can’t afford to waste a single penny. That’s why Abbo Tax CPA works so hard to help our clients economize. We save you money on your business operations and your taxes.
Abbo Tax CPA works with San Diego small business owners and entrepreneurs on an individualized basis. We understand that each situation requires thorough analysis to find the right accounting solution. There is no one size fits all.
We provide tax preparation and accounting services for self-employed individuals, corporations, LLCs and more. Our CPAs make it their top priority to remain up-to-date on state, federal, and local tax laws. Our accountants, tax professionals, and CPAs ensure taxes are filed properly and timely. They work to make your business successful. For a consultation on how Abbo Tax CPA can help your business, call today.
Tax Preparation for an LLC:
As a pass-through entity by default for federal income tax of U.S. Corporations, LLCs pay tax twice at entity level as well as after shareholder distribution; however, it’s paid only by single or multiple owners. The owners must be aware of the forms that LLC tax preparation services have prepared for the income tax of company once it is organized as LLC.
As San Diego’s best accounting firm, Abbo Tax CPA is ready to assist all aspects of your LLC’s tax filings. Call us at 619-269-8190 to schedule an appointment.