Creating an LLC and reducing tax burden

LinkedIn findTheDot
May 12 21 Comments

I will be creating a business as a side work and create an LLC next year while working for corporate. Are there any good resources I can use to learn more about how I can use LLC to reduce my overall tax burden?

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TOP 21 Comments
  • Microsoft gfba68
    LLCs do not limit your tax burden, it's just a shell. There are no tax moves available to an LLC that aren't available without one.
    May 1210
    • Tax deductions on business expenses (laptop, car, etc) that double as items for personal use, to my knowledge.

      Obviously more useful if you’re gonna spend a lot of money.
      May 12
    • Microsoft gfba68
      you can get all those deductions without an LLC
      May 12
    • You can’t deduct a laptop or car for no reason without an LLC.
      May 12
    • Unless you can explain how it’s legally possible.
      May 12
    • Microsoft gfba68
      You can't deduct a laptop or car for no reason with an LLC, either
      May 13
    • You don’t know anything about taxes
      May 13
    • You can deduct business expenses
      May 13
    • Microsoft gfba68
      I actually know quite a bit about taxes. More than you, obviously. I never said you can't deduct business expenses, just that you can't deduct a laptop for no reason. If it is a business expense you can deduct it regardless of whether or not you have an LLC. The legal form is completely irrelevant.
      May 13
    • It was implied when I said “you can’t deduct a laptop or car for no reason with an llc”, that the purpose you’d make such purchases are for operating the business: that is, they are business expenses.
      May 13
    • Microsoft gfba68
      You can deduct business expenses directly on schedule c, no need to form an LLC or any other corporation for that
      May 13
  • New / R&DaFuC30
    The are no “real” tax reasons to do an LLC. It’s just legal protection.
    May 121
    • Travelport / Engbuttnpushr
      Besides not being subject to double taxation of course
      May 12
  • New / Other
    DuQvV7y

    NewOther

    BIO
    Did stuff. Hustled hard. Retired
    DuQvV7ymore
    An LLC does not reduce your tax burden.

    Making less money does.
    May 130
  • Travelport / Engbuttnpushr
    Limited Liability Companies for Dummies
    May 120
  • Intel / EngWho.Dis
    Yes, you can infact reduce your tax burden with an LLC. Either buy cheap ass empty property in Nevada and register your business to that location or purchase a post office suite (basically giant PO Box) in Carson City or Reno Nevada.

    Your relative tax burden will be slightly decreased by avoiding state taxes, but federal taxes will hit just as hard.
    May 134
    • Microsoft gfba68
      You don't need an LLC to do that
      May 13
    • Intel / EngWho.Dis
      Sure, you can do the location game just as a W2. However, your W2 will trace back to the location that you worked and you need multi-state filing. That benefit would be on things like personal capital gains.

      However, if you plan to contract out services you will want the LLC for legally limiting your liabilities rather than let a lawsuit garnish 100% of your assets. If you’re going to make an LLC for the few legal benefits, maybe even a company needing a partner, then go ahead and be selective with your location.
      May 13
    • OpenTable Meliodas
      Moving to Nevada to conduct business kind of defeats the purpose.

      Unless you are talking about engaging in tax fraud, which begs the question of why bother with the LLC in the first place?
      May 13
    • Intel / EngWho.Dis
      1) It isn’t tax fraud by any stretch of the imagination to register a business in any given state.
      2) I’m kind of assuming a LinkedIn person wants to run a Internet-based service with a low number of employees. My advice really only applies to a traveling contractor or remote work - I’m assuming this is a national level business. If this is a storefront, you will not stand to gain here(independent of any state we’re talking about)
      3) If you do 95%+ of your business in 1 single non-registered state, then you probably won’t want to do this. Some states say that qualifies you to regulations of the non-registered state (probably the more liberal states).
      May 13
  • OpenTable Meliodas
    A CPA.
    May 120

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