3 ms·
Allow me to expand on this a little: Anything an LLC pays as "regular income" is an expense to the LLC and is not taxable at the LLC level, with the exception
by will_brown 12y ago
Allow me to expand on this a little:
Anything an LLC pays as "regular income" is an expense to the LLC and is not taxable at the LLC level, with the exception that the LLC will have to pay payroll taxes. Of course the wage earner will pay both Federal and if applicable State income taxes.
An LLC has flexible tax structure, and at the federal level may be taxed as: 1. a sole proprietorship; 2. a partnership; 3. a C-corporation; and 4. a S-corporation.
An LLC may provide legal protection (limited liability) to its owners; however, that protection is generally lost when it is a single member (only a single owner) LLC.
You are correct that the California franchise tax (minimum of $800 annually) is wildly expensive compared to annual compliance filing fees in other states.