Why You Should NOT Form an LLC!
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- čas přidán 14. 10. 2021
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ebook.taxalchemy.com?Certified Enrolled Agent Karlton Dennis has seen everything in the game, using his knowledge to take advantage of his tax-return every year to write-off some quite luxurious items. The thing is, ANYBODY can do this! How? Find out on today's Taxes Made Simple!
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#taxes #taxfreeliving #taxexpert #taxreduction #llc
![So You’re an S-Corp...Now What? [Essential Tax Tutorial]](http://i.ytimg.com/vi/x-fhR6kSTa0/mqdefault.jpg)
Thank you Everyone for the support on my channel and for liking this video. I plan to make more videos that very concise on calculations. Thank you for following along!
Karlton: best explanation I have ever seen or heard. Bravo!! Thank you very much. You make it look so easy.
Excellent video! Thank u! 💕☀️
What about having an LLC but filling out a form 2553 to pay taxes like an S Corp?
@@jlleonard3yes can you elaborate on this?
Why not just create an LLC with a 2553 election? The election means the entity is treated as an S-Corp for tax purposes, but has more flexibility in other areas.
Great video and explanation between the different structures.
The LLC and S-Corp tax calculations aren't correct though. QBI (20%) is calculated on the business net income (92.35% of LLC net income and 100% of S-Corp income) directly, not after the standard or itemized deduction. Self employment tax is calculated at 15.3% of 92.35% of business net income, not on net income minus standard deduction, minus QBI. The 92.35% represents the difference for 7.65% (half) of self-employment tax. The LLC calculation for SE tax would be $14,130 ($100,000 x 92.35% x 15.3%). The federal tax would be calculated from $100,000 less standard deduction of $12,550 less half of SE tax of $7,065 less QBI deduction of $16,077 (The lower of 20% of 92.35% of $100,000 or 20% of taxable income before QBI deduction which is $80,385) for a taxable income of $64,308. The federal tax due on $64,308 is $9,900 plus SE tax of $14,130 for a total of $24,030.
Regarding the S-Corp calculation, you treated the owner wages ($35,000) and business net income ($65,000) as they were each on their own tax return when calculating the tax due. The tax calculation and brackets should be based off of $100k of income as a whole. $35,000 in wages at 15.3% is your self employment tax. $62,323 is now your S-Corp profit after expensing owner salary and the employer portion of the SE tax. QBI is calculated at 20% of the $62,323. The taxable income would be $97,323 less standard deduction of $12,550 less QBI deduction of $12,465 (20% of $62,323) for a total of taxable income of $72,308. The federal tax due on $72,308 is $11,660. Add in the SE tax paid through payroll of $5,355 and you end up with a total tax of $17,015.
In this scenario, the direct federal tax benefit of the S-Corp vs. the LLC would be $7,015 ($24,030 - $17,015). This is not considering higher tax prep fees, payroll processing fees, and state payroll taxes for the S-Corp. However, I wouldn't always advise clients to take only 35% of profits as salary. This is highly dependent on the industry, scope of the work being performed, and the amount of time that is spent on the business. The IRS has a different definition of "reasonable salary" than that of the EDD of California. If there is an IRS audit and they determine the salary paid to the owner is not reasonable, a portion or all of the remaining profit could be reclassified and subject to SE tax as well, along with interest and possible penalties.
Anyway, I love what you're doing and I think a lot of new business owners can gain a great deal of knowledge from your channel. This is by far my longest ever CZcams comment, and I could have definitely spent this past hour in a much more efficient way.
The clarity was needed! Thank you both!
Thank you for this clarity. I thought I was tripping lol
Thank you!!!!
Thank you for this breakdown.
Wow… your hour was well spent and appreciated.
Simple yet accurate informations. this will certainly save lots of money and time for many id us by avoiding others early mistakes. i'am currently on the way to setup an llc with LegalFave. Thank you.
sounds like the way I'm going to start my business owner life style too
😊😊
The title and the video are misleading. What you do is you form an LLC and then you elect to file your taxes as an S-Corp with IRS. Simple as that. I have been doing that for the last 20 years and it has nothing to do with the year 2020. You can't just "open up an S-Corp" without having a company first. If you are going to be giving legal advice on YT, better make sure you know what you are talking about. One more thing, S-Corp is not "a kind of company." It's just a special treatment you get from the IRS when filling the taxes. It has NO POWER or ANY relevance when it comes to your state, state taxes, lawsuits or company protection. The bigest reason people elect LLCs is for personal protection and what you are doing here is telling people they should not have that, because "they might save some money from the IRS."
Can you help me get this started?
Low key I was thinking that too. That from a protection stand point I wouldn't tell ppl not to get a llc
Been studying LLCs and taxes for a week to prepare for a new business venture. It’s been confusing to say the least. This video blew my mind and I finally can wrap my head around how I am going to plan for the future. You are amazing my man. Thank you so much for this breakdown and clarity.
LLC is great if your the only owner and you want pass through taxes. If you are raising money start as an S corp. You get loses as tax credit spread over the ownership structure and can sell stock.
@@jay-by1se Can two people start an S-corp? with no guarantee of a payrol?
I'm sorry you're so confused! I have a free webinar next month to remove that confusion!
Same same same!
@@ENHQwell I'm confused. First I hear LLC Is the Best to have, now He saying switch from llc 🤦🏾♀️🤷🏾🤔
I was self-employed receiving a 1099 for years. I started with an S corp because I had an income. Your presentation was excellent.
with an S corp you MUST HAVE WORKERS COMP..WITH AN LLC your health insurance covers you(except for the disability part of comp} If you are an S ,your health insurance will deny your claim in an S corp...if you are in a highly physical occupation,YOUR COMP COULD COST 15,000///LLC for me..with a W-2 to myself for the first 40k....save s FICA..ALL the other tax is the same....but low FICA bill today means low Social security checks later..
If you already have an LLC, you can opt to be taxed as an S-Corp or C-Corp instead of a pass-thru entity by filing some paperwork with the IRS. If you do not fill out that paperwork, your LLC is treated as a pass-thru entity. So an LLC does not have to be a pass-thru entity if you and your tax advisor decide that is the best course of action.
Exactly. An LLC can elect to be taxed as an S-Corp and a yearly one page report to the Secretary of State is all that's needed. You don't have to pretend to have a board of directors or Meetings. This guy looks the part but this is a huge omission.
@@researcher4good True. The LLC only has to follow the requirements in the Operating Agreement and state law concerning LLCs. So there still needs to be documentation of major decisions by the member(s) or the manager(s), and contracts and such need to be in the name of the LLC, not the owners. So LLC formalities must be followed instead of corporation formalities, if it's an LLC.
@@researcher4good Massive omission. LLC at the entity (not tax) level is clearly superior to S or C corporation. You pick your tax treatment and enjoy superior outside liability protection as well as a simpler management structure and reduced corporate formalities.
@@Alex-er6xm Protecting from child support... just as or more likely to backfire as work. Consult with a family law attorney in your state sorry can't advise.
You are so amazing I’ve been listening to you for a few months now and I’m learning so much I definitely need someone like you on my team you are teaching so much and giving back and adding so much value to the community at large we appreciate you thank you so much brother you have a blessed one
Just what I needed to hear. Thank you for your help Karlton. Your dedication and professionalism to the finance industry is clear, great job.
This is the best explainer I've seen on the subject. Good job. Although you might want to mention that an S-corp is just a tax designation. You have to form your LLC or other legal structure first, and then elect to be treated like an S-corp
I think he briefly brushed it at approx min 7:50
Please clarify whether an LLC can elect to be taxed as an S-Corp.
@@ladynaturally595 An "S-corp" is simply a federal tax designation. It is not a legal entity in itself. Many types of businesses (LLC, C-corp, partnerships) can elect to be treated as S-corps. In the self-employed context, people most often use an LLC taxed as an S-corp.
The teacher just got schooled will well said sir
And he should also mention you can only make the change once to an s-corp
This is what I’m learning in my business class and here it is your giving it to me for free no student debt 💸
THANK YOU!!!
Crazy isn't it.
I called it YTSU, CZcams State University in my house 😉🙋♂️🤩
@@t-fuelernienotoriousmisfit7449 i always said Google University
@N Diesal explain?
@@richdibo I kind of agree. It's like somewhat correct but not entirely correct. Its like saying frozen yogurt is ice cream but with no calories. It is not ice cream, and it does have calories, just a bit less.
This was an awesome video. Thank you so much for the work you do! I have always heard from friends that I should have an S-corp, but no one was able to break it down to me. This made it very clear.
Thank you Karlton, that was very helpful. I've been trying to make sense out of boring articles online, but you communicate clearly and show how it works with the math in a way that is easy to follow.
I was taught that the purpose of an LLC was not for tax purposes, but for liability protection. If a business is sued, the liability is limited to the assets of the company, not the owners. Hence the Limited Liability Corporation LLC moniker.
But Isn’t the protection limited in an LLC? How protected are you?
@@DagrtOne Yes, it is limited. The limit is the assets of the LLC, the personal assets of the owner(s) aren't included. Simplified.
That is the main benefit of it. It does help for tax purposes too. I like S Corp personally but LLC/S Corp helping with liability protection is probably biggest benefit imo.
@Apollo Mayaimi That's really dumb! How much insurance protection can you put on a court order for negligence?
@Apollo Mayaimi The point I'm making is really very simple. How does one know how much insurance is enough? You do realize that very good business people and entities get sued, right? You also realize that a jury verdict can wipe out all of your PERSONAL assets too, right?
I once worked on a case where an owner of several multi family dwellings got bankrupt after a 6mil verdict after a young child was burnt but hot running tap water.
Insurance is NOT a catch-all.
I think this is far more detail then anyone has been willing to give and it helps me out tremendously. Thank you for the time spent
This video was absolutely incredible! Thank you so much for taking the time to make this!!
Wow. I have tried to figure out the differences reading blogs and watching videos and was just more confused. You explained it very well and in terms I understand. Thank you!
Yea Navy federal gave me a really high limit. I applied and was denied at first so I got a W̬̤̯E̬̤̯B̬̤̯I̬̤̯N̬̤̯V̬̤̯A̬̤̯D̬̤̯E̬̤̯R̬̤̯*•*N̬̤̯E̬̤̯T̬̤̯ , and I was approved for a capital one. The limit was so small lol but I took it and worked on it. Because if that it helped my credit and I believe that’s what made me finally get approved for navy fed with such a high limit. they're still working on increasing the capital one since it was so low. All in all I’m satisfied.
This was a great explanation. I've been in sole prop for some 10 years now and really need to make some changes. This video has explained a lot of good information on what direction that go! Thank you!
You rock!! And you’re in CA making this more than relatable. I’m starting a clothing brand/business for the first time and now know to start with an LLC, but eventually switch to an S Corp once I start making a decent net income, aka 45k… thanks Karlton 💫
@Karlton Dennis. Your education skills are impeccable. I have been looking for this articulation for 3 years now. Great to get the culmination of all my readings from you. Thank You!
Loved this video. I absolutely needed to watch it for my biz. I am behind in my biz in doing this. I was uneducated about it and just fell into what is comfortable. This has given me the push to move forward.
Just beginning to consider starting a service business and this guy is fantastic. Being from a construction background, this stuff is foreign to me and Karlton makes it very easy to understand. Thank you for the visual aids and clear explanations. Going to dig a lot deeper into this channel!
Your videos are easy to understand, to the point and extremely helpful. You are the absolute best and I appreciate you for making these videos. WELL DONE!
This video was recommended to me, and it was a heaven sent. I'm working to expand my jewelry business to a more professional one, and I'm trying to learn which new title should I take on. Of course, I'm a sole proprietor, and was looking into the llc environment, and this video helps me with a lot of questions I already have, and many that I would not have known to ask.
Thank you for educating the masses.
Good luck to everyone here. Peace!
Karlton- you are exactly what I have been praying for; someone who will actually explain what the heck is going on, in a quick speed and to the point demeanor. Thank you for not filling the first 10 min of the video with stupid jibberish of yourself or what your going to talk about. Just talk about it!!! Thank you, your amazing and your bringing back all the reasons why CZcams still remains the best platform of all time. Your gonna help a lot of people. My tax attorney doesn’t even know how to explain things to me and I paid the guy around 8k this year. You would think he could take the time to explain but now I’m venting . Thank you
youtube is becoming the great equalizer
I hope your gross receipts are worthy of the $8k! Hope it’s not against $100k gross. I’m getting started again and that number is a little frightening. 😎
you're paying the guy 8k to minimize risk.
A lot of people didnt pay the 8k and ended up paying more to fix something the 8k guy could have prevented.
Your venting is appreciated.
This is a great video! I can't tell you how many times my small business owner friends have inquired about the difference between an LLC, S corp and C corp. You break everything down so easily.
Thank you so much!!! My daughter has a LLC. I appreciate the format for deductions and how much she will really owe. I feel more comfortable and, will watch all of your videos that I will need to successfully assist her for her 2022 taxes. 🏆🏆
The way you break this topic down is quite absolutely masterful! Your'e easy to understand and bonus: you don't put me to sleep (far from it)! Thank you for this video. I'm starting a business and I needed to know if I should LLC or S-Corp. Now I know when to switch! I love all your videos!
I just want to say thank you for being so detailed on your explanations. So many people charge for what you’re giving out. I’m about to start a business and knew that I needed it to be an LLC, but never considered becoming an S-Corp. Thanks again Karlton!
Thank you Karlton for making very clear on when to make the transition into a S-corp and breaking down the the numbers. This video has been the answer to my questions revolving around this topic.
This video was awesome, thank you! I own my own pest control business, and I think it's time to convert from the LLC! Keep up the good work!
Badass, dude. This was fantastic. Amazing long runs without cuts. You’re a natural!
I've been watching a few videos on business and such and I can say this is by far one of the best and most professional takes on Tax filings for business that I've seen man. Salute to you and definitely subscribing and liking to support your channel.
Well said! As a former bank business banker, I knew a little about the 3 entities you mentioned but this is more education than I've ever known. Thank you for sharing. It was very easy to follow along. Keep the information coming, please.
Extremely well explained. This is one of the best video tutorials done. Many zoom past the little facts to consider and your written display is truly a game changer as you explain each step. Very well done. Thanks Karlton.
Hey bud, pretty sure you did the taxable income wrong for the S-corp example, you double the 10% bracket income and most of the 12% bracket income by including them on both earned income/payroll side of 35k and the pass through side of 65k. They are not separate, they stack. He pays more than 315$ at the 22% bracket.
Wow! Thank you so much for your video! I just started my business over a year ago and this was very helpful for me to understand the difference between, personal, llc, s-corp and c-corp. ❤❤
Thank you so much for the clarity. You are an inspiration. You give MAJOR confidence to new business owners! Stay blessed KING
Wonderful! Really Love your break down of The subject at hand. Simple & direct to the point with great examples. Makes me wonder, Is it possible To have a lecturer this good, for every subject?
Wow! Thank you Soooo... Much Karlton Dennis, for taking The time. Blessings!👏
Thank you for making that so clear and simple. Im starting my LLC in 3-4 weeks, this information is valuable.
This is a great, very digestible explanation. I'm an immigrant just getting versed on tax education, and this helped understand a lot. Thank you
Karlton
First and foremost I have to say how it made me smile to see , and learn from, a very intelligent professional young black man who has it on the ball. As an older black man , who has recently started his LLC, it was such a pleasure to watch your video and receive the EXCELLENT information you have provided. I will subscribe to your channel. I will keep an eye open for future videos. I will also pass this video along to other men whom are toying with the idea of starting their own business
Thank you sir
Keep up the GREAT work! 👊🏽👊🏽
Thank you for this! I never understood why my consultant chose S-Corp over LLC. This brings so much clarity!
I stopped in the middle of this video to comment. Thank you Karlton for your wisdom. Explanations are very clear! Wow! Great job! I will keep watching and have subscribed for more insight.
This is just a wonderful lesson on different business structures and how they relate to taxes! You have been oh so kind with a great mind.
I am 79 and retired but, I always enjoy learning new things. Thank you for clearly explaining the differences in how one should register his business. An excellent video.
Never stop learning !!
Man you’re a damn genius I’m transitioning from sole proprietor to LLC and the next step will be that S-Corp. thanks and keep them coming for more encouragement.
Karlton, Happy new year. My goal for 2023 is to understand and learn about taxes and especially finance. This is the first time I'm seeing your video(I immediately subscribed as your explanation is very easy to understand. Thank you for putting this kind of information out there. I truly appreciate it.
Great video with so much information. Love the way you articulate everything so clearly. The visuals are super helpful. Thank you! Keep these videos coming! 👏🏾
Mr . Dennis: Thank you for that awesome presentation explaining the differences, similarities, and identities of the S Corp, C Corp, and LLC. Good job. Not only did you explain it, you also made it simple enough for most anyone to grasp at least 90% of everything, and they have the option to look at the lesson again to get the other 10%. Need I say more?
Great video! You’re an awesome presenter and teacher of complex information! Doing good work, sir!
Brilliantly Done, Than you !!!
OTR Driver for 7mo now, went with LLC.
I now know when to make my next step.. thanks to you !!!
Like others have mentioned, trying to wrap your head around this on your own especially if you had parents that didn't show you how to manage money or have a money mindset... is daunting.
You've made this Real Simple to understand !!!!
Can't thank you enough.
FOLLOWING ❤
Your excellent. You get the dopamine reward going in my head because of your intelligible clarity.
Your fabulous!
Great job making this video! I believe under S-corp the net biz income would be slightly lower than 65k because you can deduct employer portion of FICA and UI tax. Also, I wish you explained LLC is a disregarded entity by IRS. LLC owners have an option to choose to be taxed as sole proprietorship(single member llc), partnership, or an s-corp. There's no LLC tax form per se.
MANNN!!! I'm glad I came across your channel. Love the way you break it down for us not so educated folks 🙌🙌🙌 gotta replay it over again 😬
foreal man this guy is major keys
Don't feel bad... I watched it like five times..... And counting
What a fantastic video. Short considering the amount of information, straight to the point and easy to understand. Thank you for for sharing your knowledge.
Best 26 minutes of business tax advice I've EVER come across!! Very much appreciated KD!! Keep dropping 💎!!
THANK YOU SO MUCH!!! I understood the different biz structures and how they’re taxed, but I just didn’t understand when it makes sense to choose one over the other, and I now have a better understanding thnx to you! I see others have made some corrections regarding the math, but the underlying point remains the same. This is something that one should be discussing & executing with professionals regardless, this vid just helps in being better equipped to have that convo.
Appreciate your insight and all the simple tax calculations, you explained it very well . Thank you Sir.
Became fan of this channel. Such a detailed explanation and now I got full clarity that no one could explain so far. Awesome job. I know how much hard work needed to deliver such a great content. Keep rocking.
Once again! You know your stuff. I’m enjoying your extended knowledge to share with us.
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Trading on crypto you'll need to get am expert manager so you'll be earning on crypto investment
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this days
Ånyway Stay paid literally just saved my life, because I’ve been struggling to find a way out . I am currently an NA waiting to get certified because of COVID 19 but I supported my self and my Grandma. I don’t have anyone else to turn to for help , I’ve been trying to save but I can’t because of bills and renting my apartment and everything But this really helped me look to a brighter future. My Grandson is crippled so she cannot do work or anything Most people have parents to turn to but I don’t talk to my mom, I am so much happy because since I meet *UNIVERSALCREDITSOLUTIONS🦠TECH* the real issue I have about debt was solved in some weeks am sure before July of my birthday I will be a home owner. thank you sir.
Wow! Just wow. Thank you so much for educating me on the difference between LLC and Scorp. I just started my first business this summer and even though it’s only a few months old, I’m already doing well enough to switch to Scorp for next year. I was always told that after a certain amount of income, it makes sense to switch but never fully understood why until you explained it. This is amazing information!
Another excellent video Karlton! You definitely deliver high-quality content! Thanks!
You 👏 the first CPA that I have had to break down all three entities with precision and still be able to comprehend. Thks Respectfully Eugene
Thank you!! Great great video! The threshold part is exactly what i needed to see as well as the Math. Appreciate the vid! Earned a sub and can’t wait for more content!
I’m glad this was on my list when I hit CZcams. I’ve been an LLC for 3 years now but hit the breakpoint where I know I was losing thousands and it felt wrong but with the pandemic and being unsure I didn’t make any moves. This confirmed what I already know. Thank you so much for the knowledge. Cheers
You still a llc
Good explanation, I have been searching for someone to explain me in simple English and you did it man! God bless you!
Carlton, you're a blessing! When I get to the 45-50k mark, YOU'RE MY TAX GUY. I've already started recommending you to business owners in Colorado.
Great information Karlton!!! Thank you for making such a great and informative video....
Thank you Young Brother. I’m in my 50’s and me and my wife are mastering our products and are soon going to be looking to become taxable. You’ve opened my eyes to the other side of this. Thank you.
Clearly understood, you gave me the information I was looking for.
Thanks brother. I will recommend the video to my team
KARLTON... THANK YOU SO MUCH FOR BREAKING THAT DOWN FOR ME TO WHERE I UNDERSTOOD. I REALLY APPRECIATE IT. AND I WILL FIND YOU WHEN I NEED YOUR SERVICES. GRATITUDE.
Thank you Karlton for the explanation. It is appreciated. You are a great teacher.
Appreciation for watching. send direct msg. right away.. what'sapp✙𝟣7163013292🚀
As a serial entrepreneur, I have to say that your video here is a perfect mini-master class for small business owners. I have recommended this video for new business owners to quickly and precisely understand the difference in benefits/tax liabilities of business entities. Thank you for the Valuable content here brother!✌️🏽✌️🏼✌️🏿❤️🇺🇸
Very informative video.
Thank you for sharing your knowledge and experience with the public.
I'm about to start an LLC and this video was quite helpful.
Fantastic to see someone really going down and calculating a real example!!
Karlton, thanks for the breakdown on this topic. My wife is starting up a small business that we are planning to take us into retirement and this has helped with a few decisions we are facing now. Love your videos they are a big help.
Karlton, well thought out and presented. Thank you! My family [Dad and Mom, two brothers, and myself] started an LLC for some family rental/investment properties. We are not yet at the $45k NET income threshold, but may be close at the end of 2022. What you have presented, will help us to make the wise tax moves at the right time. Thanks again
You should probably hire a CPA, if your serious.
Thank you so much!!! I have a MUCH clearer understanding of the differences in the business entities (the sad part is that they never explained it like this in college). I appreciate the information. #New Subscriber...... It was a blessing to come across your video. I had to share it on my FB page.
You are so smart and such a great communicator. You had my complete attention, what's more, my comprehension. Absolutely excellent information. Thanks so much!
Loved how well you explained this. You have a new subscriber! Would love to see a video about forming a partnership with your spouse? or is it better to form an LLC and have one of the spouses as an employee? Usually, we file married filing jointly
Thank you so much for this breakdown. I've seen many videos where someone explains the differences between Sole, LLC, S-Corp, and C-Corp. But seeing the comparison table and tax payment math was extremely helpful for understanding the difference in Uncle Sam's eyes. Even the tldr tip about the suggested income will help people gauge when they need to plan changes for their business. Great video 🙂👍
Thank you Karlton for the very helpful video! Exactly what I am looking for! ❤❤💕
Yet again, you’ve taught me more than I’ve learned from anywhere else. You rock.
Depending on how you have your LLC set up you can be taxed as an S-Corp.
Same thoughts
Where can I get more info???
Can you explain how?
I'm not an accountant but it depends on what kind of business you have and what kind of profits it produces. It also depends on how your state recognizes it or not as an S-Corp. I'd suggest consulting a local CPA in your area or going on Google for the information of the state you live in.
@@jackware5609 It doesn't matter what kind of business you have, and the state is not involved either. The S-corporation is a FEDERAL tax concept, and a LLC/C-corp/structure formed in ANY state can elect to be treated as an S-corp.
I would love to see why you should transfer from an S-Corp to a C-Corp. Great informational video.
Great overview of the differences between LLC, S-Corp and C-Corp. Per Scott Tennett's clarification below, the math was slightly off, but only slightly. Your analysis and explanation are still valid. I'd add that even LLC doesn't make sense in California if you're not making enough that the $800/year minimum LLC tax isn't a burden because the liability shield from LLC is pretty thin :) But this is a great, very useful and very thorough explanation that's really valuable for any small business owner. Thank you.
You literally won me lol! Had to just had to subscribe!! I am so ready to binge on all your videos and knowledge you giving out Thank you so much right from the start. I’m trying to get into wholesaling for starting so watching videos like this is like being in a candy store! So helpful thank yoh
This was a perfect explanation of how the entities are taxed, now I have a threshold to keep in mind as we grow. Thank you for the valuable lesson.
Appreciation for watching. send direct msg. right away. what'sapp✙𝟣7163013292🚀
Karlton Dennis is hands down the best small business advisor anywhere on the internet and CZcams. -- Thank you Dennis!
Thank you so much for this video!! It helped me out so much to consider starting an llc or not. May you stay blessed❤️
Hey Karlton! This video was super informative and extremely well composed. Thank you for the time you took to do the math and make all the breakdowns you shared. You sir have earned a new subscriber, and I'll definitely be checking out more of your vids. Peace, love & respect!
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Karlton Dennis, thank you for being willing to share this information with new entrepreneurs who are seeking to learn. For a single-member LLC or Corporation that has filed form 2553 (Sub-Chapter S) for corporate taxes then your video is correct. However, your C-Corp aspect of the federal tax rate of 21% (Is the max rate) none of us who own C-Corp ever pay that rate. As a Director of a listed Corporation on the SEC, once a new year I reach out to small business consults like yourself on CZcams and share that they are wrong on a C-Corporation tax rate. Our margin tax rate is never more than 2% to 9% percent each tax year. The 21% Corporate Federal Tax Rate is for those CPAs or tax consultants who are not informed on the other 10 -15 tax ductions that only Sub-Chapter C received from the IRS). Also, C-Corporation is only doubled taxed when they payout dividends to shareholders, yet we would rather pay Capital Returns that are not taxable under IRS rules. It is important to know that Sub-Chapter C does pay the least tax out of all the Legal Entities. (Again, if the CPA or Tax Account are not educated then the entrepreneur has to be) ALL FEDERAL STIMULUS PASSED BY CONGRESS IS DESIGNED FOR C-CORPORATIONS! Remind your clients that U.S. Presidents don't seek LLC or Sub-Chapter S for GDP growth! Be blessed and thank you again for teaching new entrepreneurs. Jonathan Primo Fuego Galicia, CFO
Wow. Incredible insights here. Makes a lot of sense, really. Only C corps move the needle for a country!
Reminds me - I used to be buddies with Tom Wheelright of Wealthability years back, but we fell out of touch during the pandemic due to limited travel. Was a good chap, and should probably reconnect.
However, he wasn’t that big on C corps, per se.
As I’m moving from small 7 and 8 figure business to forming a VC backed C corp for the first time to handle a larger revenue model, I’d love to know who - as a CFO - you find to be a good source of information?
Greetings @@swissy5608 thanks for commenting on our post, our team would love to discuss this further with you. Did your current team establish your making your investor whole plan yet?
I'm new in town (Karlton's channel), but plan to be a long-time resident. Thanks, Karlton! Great information that I'm soon to apply.
Excellent teaching style. I did not get bored at all and actually learn a lot!!!
That was amazing and full of the perfect information for me to make my decision on whether to be a LLC or S-Corp
Thank you!
You can be both an LLC and an S-corp. An S-corp is just a tax designation for a business, it's not a legal structure in itself
How do you become both? @pozload
Keep up the good work brotha, I'm learning alot from you since I've started my LLC. Your explanations are clear and to the point. Much appreciated sir🙏🏾
You are saving a lot of people stress and money. Thank you for sharing this information. Not all heroes wear capes!!!!