Employment/Tax Question (1 Viewer)

[Pipe Line]

Just to be clear, whenever you get a tax return that means that you just overpaid the government over the course of the year. Ideally you’d want that to be $0.

Didn't realize that.....that's annoying. Would rather not over pay the government

 

[Adolph Coors]

I don’t think there is much of a point in doing that if the LLC is taxed as a partnership or a disregarded entity. All of the income is getting passed through to the members.

i got it wrong. S corp is the correct term

 

[That SOB Van Owen]

i got it wrong. S corp is the correct term

I mean you personally technically save the self employment tax, but that half of employment tax is being paid by your s corporation which if 100% owned by you is just less cash you can theoretically distribute so basically you’re still paying it.

 

[That SOB Van Owen]

Didn't realize that.....that's annoying. Would rather not over pay the government

That’s right, you need to look at the total tax line, not the refund line. Really you should want to owe a small amount to fall within the safe harbor of no P&I. That means the government gave YOU a small 0% loan over the course of the year.

 

[Huskerscoop]

Being a tax expert as this is my full time job is doing taxes, I would recommend you start off by being a single member LLC that files on whats called schedule C of your individual tax return. I would put away about 20% what you make for taxes because you will get taxed on 15.3% of your net income for your self-employment business. Once you hit the 30-40k mark, then you will need to look at becoming an S-corp. The S-corp has a little more requirements. That should get you started.

 

[Pipe Line]

Being a tax expert as this is my full time job is doing taxes, I would recommend you start off by being a single member LLC that files on whats called schedule C of your individual tax return. I would put away about 20% what you make for taxes because you will get taxed on 15.3% of your net income for your self-employment business. Once you hit the 30-40k mark, then you will need to look at becoming an S-corp. The S-corp has a little more requirements. That should get you started.

Thank you. So realistically, my expectations are maybe an extra $5K a year on top of my normal gross income. I understand annually, that's not a lot, but I'm more focused on the immediate financial gain. Bills, daughter's weekly activities, nice gift for the wife, Pre-K, things like that. Trial and error for a couple years then re-evaluate. I'm just planning on snow blowing and mowing on the weekends, through the neighborhood, for a couple years, trial and error, then re-evaluating from there. My ultimate was just to figure out if the subtracted tax refund would be worth the immediate financial gain. It sounds like it would be worth it.

 

[Jim14510]

Constant Pain in the Ass

 

[Jim14510]

Being a tax expert as this is my full time job is doing taxes, I would recommend you start off by being a single member LLC that files on whats called schedule C of your individual tax return. I would put away about 20% what you make for taxes because you will get taxed on 15.3% of your net income for your self-employment business. Once you hit the 30-40k mark, then you will need to look at becoming an S-corp. The S-corp has a little more requirements. That should get you started.

 

[Jim14510]

Accept cash only & don't pay taxes.

My officially unofficial suggestion.




Not really lurking IRS agents.







But @Pipe Line

 

[Baron Winnebago]

Cash under the table. This isn't even a question. Don't listen to BIG ACCOUNTANT

 

[skersker]

Financially, it's amazing how much differently I think at 31 in about 6 weeks compared to first being married 6 years ago lol

lol yep. add kids into the mix and it gets more complex

 

[Pipe Line]

My officially unofficial suggestion.




Not really lurking IRS agents.







But @Pipe Line

lol just unofficially curious, what's the tax penalty/fine if caught? I think you can still claim a few thousand on taxes even if you don't have an LLC and be good right? Or just shut the hell up about it during tax season completely?

 

[herbsinator]

lol just unofficially curious, what's the tax penalty/fine if caught? I think you can still claim a few thousand on taxes even if you don't have an LLC and be good right? Or just shut the hell up about it during tax season completely?

Pepper your angus to go to jail

 

[Jim14510]

lol just unofficially curious, what's the tax penalty/fine if caught? I think you can still claim a few thousand on taxes even if you don't have an LLC and be good right? Or just shut the hell up about it during tax season completely?

Would depend on the tax owed. Somewhere between 5%-20% of the tax. So 10k revenue you've probably got at least 4k deductible expenses. 6k net round number 30% tax 1,800 tax. In that situation 5% penalty. Interest from April 15th of the year following the income. Interest rates change monthly.

 

[Jim14510]

100k is a much different conversation and you should be an S Corp at that point.

 

[Baron Winnebago]

IRS is going to get gutted anyways and put 90-95% of accountants into the poor houses. Enjoy that extra 12% on the couple Gs you'll make mowing

 

[2010sarenevercoming]

lol just unofficially curious, what's the tax penalty/fine if caught? I think you can still claim a few thousand on taxes even if you don't have an LLC and be good right? Or just shut the hell up about it during tax season completely?

 

[Rise to Power]

I'll never understand people hesitating to make more money because they will have to pay more taxes...

I guess if it boosts you into some entirely new bracket that is justified, but there are ways to account for that.

Anyway, cash is always king. No checks, PayPal, Venmo, CashApp etc. Just old fashioned cash.

 

[Pipe Line]

Fantastic!

 

[Pipe Line]

Would depend on the tax owed. Somewhere between 5%-20% of the tax. So 10k revenue you've probably got at least 4k deductible expenses. 6k net round number 30% tax 1,800 tax. In that situation 5% penalty. Interest from April 15th of the year following the income. Interest rates change monthly.

So in that situation, is that 5% of $1800 in penalty?