I work full time as an IT employee and i set up an LLC mid 2017 for a side business i wanted to start. I have spent some money on the start up but i haven't done any actual business with it but hope to do in the coming months.
The accountant who is about to file my personal tax return won't touch my LLC for reasons best known to him. He is advising that i file for the LLC separately. I haven't read anywhere where it says i could file for LLC separately without me filing as a corporation. Now i don't know what impact that will have being that i havent made profit and what impact it will have on my future filings as i would definitely kick off my business in a few weeks. Would i have to continue to file as a Corporation and does it mean i will be paying more in taxes? Also should i file as S corp or C corp.
These are questions best answered by your accountant. If you do not trust him,get another one.
I am not a tax guy, however, I believe a Subchapter S corp enables you to claim side business expenses against your full time income. In other words, if the LLC earned $1000, and you have $5000 in LLC expenses, you can only write off the $1000 and you have to eat the rest. With an S corp, you can write off $1000 in expenses against the S corp income and claim the balance on your 1040. To ensure compliance with requirements imposed by the IRS under Circular 230, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code, or (2) promoting, marketing or recommending to another party any transaction or matter addressed herein. So you need to talk to your tax guy. Or call Wil Upton, a great tax guy at 410-766-1967.
This information is provided as general guidance only, not actual legal advice. I have not reviewed your paperwork, and unless this is a Maryland case, I am not licensed to practice law in your State. The fine points of your question are often found in the laws of your State. So, this response is not intended to be legal advice and you should not rely on this information to make decisions. I urge you instead to consult with a local attorney.
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