Hey business warriors, welcome to the show. I do have to apologize that there is a big concrete mixer truck parked outside today, and I don't know if you're gonna be able to hear it in the audio. I've waited for several hours, and it hasn't moved, so we're just gonna start recording. Today, we are gonna be talking about how to save even more taxes with your small business. It's about basically converting your business structure to an S corp from an LLC partnership taxation. So let's kind of start from the beginning and let's explain how it works with an LLC. If you're a multiple-member LLC, generally you will be taxed by default as a partnership, and that's the way it works here in New Jersey. Your state might be different, you'll have to check that out. With LLC income, it's what they call a pass-through business. So the LLC itself is not taxed, but the income passes through onto your personal tax return and is taxed at personal rates. If the business has two members and they each have a 50% share, 50% of the profit goes to each of them and it's taxed at their personal rates on their personal tax returns. The pros of LLCs are you have limited liability and can also have deductions. So any money you spend for your business that eats into your profits can be deducted, and then you don't have to pay tax on that money. For example, the rent I pay on this office, that money is a tax deduction, so I'm not taxed on that money. I'm only taxed on my profit. However, the disadvantage of the LLC structure is that you become liable for self-employment taxes, also known as FICA taxes, which include Social Security and...
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Video instructions and help with filling out and completing Which Form 1120 C Farming
