LLC's, a.k.a.: "Limited Liability Companies"; have gained enormous popularity in the past 15 years. They are a creative legal entity that has tax characteristics of a chameleon. They are adaptive and can be taxed as S-Corps, C-Corps, Partnerships or disregarded as its own entity. So from a tax standpoint saying you have an LLC really tells your tax advisor next to nothing. What this also means is that you have to plan ahead. Our tax system has lots of alternative choices. But most importantly, now is the time of year you want to really see were you are at. Sit with a tax advisor and get a hold of your tax exposure. See what you can do to reduce your and perhaps your partners tax liability "before year end". What options and choices do you have? In some cases it's not just the income tax in your bracket. It is also the additional self employment tax which is another 15.3%. So, spending a little now on a good tax advisor can pay for itself in tax savings.
The overwhelming popularity of LLC's has a great following from small to mid sized enterprises and professional service and investment firms. Sometimes, small companies fear spending money on a qualified tax advisor. I know this is self serving, but really , you're doing yourself a dis-service. Small enterprises should steer clear from, "tax return mill companies", and hire a dedicated professional with the knowledge and the tools to educate you and get you on a defined path. In some cases a large tax law or accounting firm, with hefty fees may not be the way to go. A good relationship is however, a tremendous resource. It's a smart investment in your entrepreneurial development and there is no reason to go it alone or to try and imitate what your friends are telling you.
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