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So their advice is to incorporate myself in order to deduct all my local and state taxes? So I can pay 15-35% federal corporate income tax rates, plus 5-10% in
by valuearb 9y ago
So their advice is to incorporate myself in order to deduct all my local and state taxes? So I can pay 15-35% federal corporate income tax rates, plus 5-10% in state corporate income tax rates, then my state income tax rates, then finally 15-20% in federal dividend rates?
Methinks someone didn't think their article through.
- deleted 9y ago[deleted]
- ajoy39 9y agoyou don't pay corporate taxes with a pass through LLC. You deduct your expenses from your income, and the rest gets passed through the LLC to you as personal income. So you're getting taxed on less because you can essentially write off any expense that you can justify as being spent on the corporation itself. The downside is, usually, that you get taxed on ALL profits personally no matter how much you actually withdraw from the LLC but if you are the only member and you're just using it for tax purposes that's less of an issue since you intend to take all the money anyway. Disclaimer, I am not a tax professional, and I do not actually do the taxes/distributions for the LLC I part won. This is just how it was explained to me by the person who actually does those taxes.