When I started my window cleaning business I decided that it would be best to have an S corp. After about 9 years of being in business I am starting to think I should of set up an LLC. I only pay my self I work alone, but it is so difficult that I need to pay a payroll company to do it. It cost me $100 a quarter. If I were a LLC wouldn't I just give myself a K1 at the end of the year. I have to do that anyway.

Thanks

#1;I guess it costs you more than $100 a quarter.On average bookkeepers charge an hourly rate of $20 to $55 per hour.

#2;It depends. A LLC is an entity allowed by state law. But for federal tax purposes this type of entity is not recognized. According to the IRS, an LLC with two or more members can be treated as a partnership, a corporation for federal income tax purposes.If you are a SMLLC, ,NOT an MMLLC(partnership unless it is a Corp), then you do not ned to file Form 1065/Sch K-1;however, you need to file Sch C/Sch SE. A SMLLC that has not elected to be treated as a corporation would include the income, deductions and credits from the business activity conducted under the LLC on your personal income tax return. Sch C/SE, Form 1040 would be filed for business income;However, your LLC as a partnership, the income of the LLC passes-through to each member of the LLC and is reported as earned income on Multi-member LLCs file Form 1065 and Sch K-1. Although a LLC is a corporate form, the distribution of earnings to the members of the LLC means that the income is taxed at the maximum 35 percent individual tax rate. The amount distributed to the members of the LLC is net deductions and other allowable exemptions of the business.

[QUOTEAlthough a LLC is a corporate form, the distribution of earnings to the members of the LLC means that the income is taxed at the maximum 35 percent individual tax rate. The amount distributed to the members of the LLC is net deductions and other allowable exemptions of the business.[/quote]


So If I were an LLC when I do my personal taxes I am taxed at 35 percent of the amount on my K1 is that correct??

You say(net deductions ) does that mean after you take out all your deductions from the LLC the rest passes on to me? I don't have a partner.

And are your deductions about the same for an LLC as they are for an S corp.

Because at 35 percent I would be paying more in taxes than I pay now to have someone do my payroll. I guess it all depends on how much passes threw to your personal. It could mean 10 percent more in taxes But less headache.

So If I were an LLC when I do my personal taxes I am taxed at 35 percent of the amount on my K1 is that correct??

You say(net deductions ) does that mean after you take out all your deductions from the LLC the rest passes on to me? I don't have a partner.

And are your deductions about the same for an LLC as they are for an S corp.

Because at 35 percent I would be paying more for taxes than I pay now to have someone do my payroll. I guess it all depends on how much passes threw to your personal. It could mean 10 percent more in taxes But less headace.

So If I were an LLC when I do my personal taxes I am taxed at 35 percent of the amount on my K1 is that correct??

You say(net deductions ) does that mean after you take out all your deductions from the LLC the rest passes on to me? I don't have a partner.

And are your deductions about the same for an LLC as they are for an S corp.

Because at 35 percent I would be paying more for taxes than I pay now to have someone do my payroll. I guess it all depends on how much passes threw to your personal. It could mean 10 percent more in taxes But less headace.