What taxes does an LLC have to pay?
I know that a single person LLC is treated as a sole proprietorship by the IRS unless it applies to be treated as S-Corp.
My question is: When the end of the year comes around, what does the LLC have to pay in taxes?
Is all the income taxed or just the profit?
How are expenses deducted?
What if the business loses money (more expenses than income)?
I’m in FL and I read there’s a corporate income tax of 5%. Is this just on the profit?
It’s just that I’m thinking of forming an LLC for a web based business and I’m not sure what to expect when tax time comes. I’d prefer not to receive "Go make an appointment with an accountant" answers.
Thanks!
Tags: accountant, appointment, corporate income tax, forming an llc, irs, money, s corp, sole proprietorship, tax time, web based business
November 6th, 2009 at 18:40
Here are two sites to tell you more about doing business in Florida. Florida has no State income tax and I do not see the tax benefits for creating an LLC.
November 6th, 2009 at 18:40
Income = Profit
They are the same thing.
Sales – Expenses = Income/Profit
Income/Profit is taxed. Sales are not taxed, only the amount after expenses have be deducted.
Exception: Expenses for business entertainment can only be deducted at 50% and penalties and fines (like a parking fine while at a business meeting) cannot be deducted