In this interview with my personal tax advisor, Adam Carroll, we discuss the importance of starting an LLC for your home based business.
Be sure and watch the entire video to learn how you can qualify for a FREE consultation.
CLICK HERE for your FREE consultation on starting an LLC.
I met my personal tax advisor as a result of attending The Master’s Course from Empower Network. I spent $5,000 to attend, and my business partner, Adam Whiting, also spent $5,000 to attend the live event in Costa Rica. While we were there, I met a guy named Jesse. Jesse and I discovered that we were both from Hurricane, Utah. It’s interesting that we had to go all the way to Costa Rica to meet each other when we live so close.
During a casual conversation, Jesse shared with us who he does his books with and how he sets his entities up. Jesse introduced us to Adam Carroll, and it saved us thousands of dollars in taxes just from the first consultation.
Starting an LLC – Interview with Adam Carroll
QQ: A lot of people come into this industry and they think they can just start a business. They are brand new, and they don’t think of starting an LLC. What is the importance of doing it right from the get-go?
A: To be honest with you, the most important part of starting a business, is getting it properly registered with the state and the IRS and making sure that you qualify for all the benefits that a home based business can give you. Most individuals that put off setting up an entity end up paying for it in higher tax rates or lost deductions. It is important to get it set up quickly because your first year, you are going to have expenses that you need to deduct. The LLC or S-Corporation is going to qualify you for those deductions so that you can put money back in your pocket when you file taxes, regardless of how much money you make.
QQ: We are at a Mastermind event right now. Someone asked a question about losses. For those that just get started and invest a lot of money into the business right away – when they have a loss their first year and aren’t making any money, is it still smart to get help starting an LLC or S-Corporation?
A: Congress has passed tax laws that allow a small business owner to either take that business loss against their personal income – which could be income from a job – or they can carry forward that loss to future years. For instance, if someone made an income of $50,000 and had a loss from the business of $10,000, instead of being taxed at $50,000, they would only be taxed at $40,000. When you take your tax rate minus $10,000 at that percentage, you put a couple of thousand dollars back in your pocket simply because you started a business.
QQ: Just last month I was asking questions about payroll. Should we be paying ourselves when we are making money? I didn’t understand all this tax stuff. I didn’t know which income you get taxed on and which income you don’t. Can you explain about payroll and how starting an LLC or S-Corporation can save you in taxes?
A: When you start to have income from a business, you have to understand that it is taxed differently than personal income. One of the benefits of a home based or small business is that you do get to take those deductions first, before you are taxed. There are also other tax advantages to having an entity in place. Self employment tax is probably one of the biggest taxes that a new home based business is going to incur because they aren’t used to it. Self employment tax includes Social Security and Medicare taxes – it is 15.3% on a federal level. By simply structuring an entity, and getting with a tax accounting professional, they can help you eliminate up to 50% of that self employment tax. It ends up being a very big deal, even with a mediocre income.
Starting an LLC – Discuss in Detail with a Professional
QQ: What is the best entity, starting an LLC or an S-Corporation?
A: This is something that you should discuss with your accountant in detail. In some cases an LLC is the right fit; in others, the S-Corporation is the right route. There are many factors to consider. Seek advice from a professional so they can walk you through those differences in a one-on-one session. When it comes to taxes, everyone’s situation is different.
QQ: Because you are following me or are on our team, Adam has agreed to give you a 100% free consultation. It doesn’t matter what you situation is. Adam, you are agreeing to do that?
A: Absolutely. My accounting firm has helped a little over 5,000 home based businesses in the last four and a half years with tax and accounting needs. We are happy to offer this free consultation.
If you need help starting an LLC or S-Corporation, maybe you need bookkeeping or tax accounting – whatever it is; you can get a free consultation. This is the person I use, that our business partners use, and this is the person our entire team is using to help them save thousands of dollars.
I am not a tax professional, so you are definitely going to want to get with someone that is. Just click the link below to get that free consultation.
QQ: Any last words, Adam?
A: Seek a professional. A lot of people let what they don’t understand keep them away from understanding it. When it comes to entities and taxes – it is a home based business, you have to treat it like a business. Taxes are going to be a part of your daily life, so you need to talk to a professional and get the details.
CLICK HERE for your FREE consultation on Starting an LLC.
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~Mike Hobbs~
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Photo Acknowledgement: “Businessman Sitting On Tax Word” by David Castillo Dominici and “Tax Breaks On Laptop Showing Internet Taxing” by Stuart Miles at Freedigitalphotos.net
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TaxBot is included with the new ONE80 product from EPXbody, and this will give you deductions that you weren't able to take if you work for.
someone and get a W-2. So anyone and everyone can use One80 to make and save Money on their Taxes, and make Money just by showing others.
how you are doing it with EPX One80. A all in one tool that give you the Biz's and the Tools all for $20.00 a mo.
With a free ONE80 website like this one: http://www.epx180.com/thomasterry The ONE80 product qualifies you for all commission and is only $19.95.
per month or $50 every 3 months which makes it only $16.67 per month!
This New tool will take the hassle out of the documenting part and your biz owners and 1099 contractors will put more $$ in theirs pocket! and yours
Stop leaving money on the table and turn those expenses into tax deductions with the touch of your finger! Track from their computer or Smartphone.
I didn't have a Smartphone so I used my Vitel Wireless online store were I make 40 to 60% on anything that I sale take a peek:
http://tomterry.vitelwireless.com were I got it at 1/2 price by buying it from myself + I got $35 Unlimited Talk Text and Web.