this post was submitted on 16 Dec 2024
202 points (98.6% liked)
InsanePeopleFacebook
2698 readers
3 users here now
Screenshots of people being insane on Facebook. Please censor names/pics of end users in screenshots. Please follow the rules of lemmy.world
founded 1 year ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
It's pretty common to form an LLC for your own, self run business even at one person. The business makes all the money, you pay your "employee" (you) a small amount and you save on taxes. Wife does this, her employee paycheck is like $25k/year.
If you ever have a friend who's not doing this, tell them to get a good accountant lol
This is so dumb I can’t believe people aren’t getting audited left and right.
A single member LLC is simply you. All the income becomes your income. It doesn’t matter if you pay yourself through a draw or not. If you’re finding ways to get your write offs over the standard deduction without spending a bunch on actual business related expenses, you’re probably doing it wrong and committing tax evasion, plain and simple.
Look into piercing the veil.
2017 tax law changed this
One of the law’s changes allowed owners of pass-through businesses—partnerships, sole proprietorships, and S corporations—to deduct 20 percent of their qualified business income (QBI) when calculating their taxes.
Edit: Better source https://www.irs.gov/newsroom/tax-cuts-and-jobs-act-provision-11011-section-199a-qualified-business-income-deduction-faqs
~~https://www.americanprogress.org/article/the-2017-tax-bills-pass-through-deduction-largely-favors-the-wealthy-and-encourages-gaming-of-the-tax-code/~~
That 20% is not in addition to the standard deduction. It only comes into play if your total deductions exceed the standard deduction.
Correct.