LLCs Don't Know What Sales Tax They Owe

“I run some out of state LLCs but they are all disregarded entities. So it’s just an individual return. I’m in the US. I used an accountant for years but he retired. I tried hiring a different accountant but they all ignored me. Maybe it’s because I’m close to the October 15 deadline. So with October 15 approaching is it fine to just use turbo tax? Or is it complicated even if they are disregarded entities: submitted by /u/WyattColt [link] [comments]”

“Do I need to pay tax? Assuming the $7,819 is entirely profit, the federal self employment tax liability alone is about $1,105, and you have a federal filing requirement. You may also owe federal income tax depending on your other sources of income.”

“This is the key. The business needs to be up and running before you can expense anything.”

“Assuming SMLLC. File Form 8832 to be taxed as sole prop after S corp termination. So yes, he can go back to sole prop, thanks to Check the Box regulation. IRM 3.13.2.23.16”

“A business loss is not the same thing as an NOL. If you have other income besides the business you may not generate an NOL. An LLC is not required for either.”

“Turbo tax charges $650 to DIY with pro help or $1,549 to do it outright. That's on top of the $200 you'll spent on the software to realize that you don't know what you're doing and need help.”

“First of all, the "risky" applied to the preparer, not the client. Second, 95% of the time, this kind of return absolutely takes more time than it should. I've seen plenty of people say "oh, it's easy," thinking it'll be an hour, tops. Six and a half hours later, the return is still not done... Finally, Intuit is in line with other professional preparers, even a bit on the low side.”

“Gotcha. Obviously I read that differently. Probably because I have clients who have yet to understand that nuance...10 years in.”

This is helpful thank you!

“You'll probably want to do it before the end of the year, just to avoid the $800 per year Franchise Tax the State assesses. I would talk to an EA in CA to see if you have to file under the S-Corp structure. If you filled last year, you probably do need a final return. I would choose an EA over a CPA for this one.”

“Imagine having your own AIRPLANE and you can't afford to ask a CPA a question”

“Given you're now starting a regular ongoing freelance gig, this is a good moment to actually calculate your effective tax rate on the freelance income specifically, self employment tax plus your marginal income tax bracket, since regular gig income adds up fast and you want your quarterly payments sized correctly going forward rather than guessing.”

“When it comes to something as complicated as taxes, if any professional tells you “this 100% is the answer” with no caveats then that should be the first sign that they aren’t competent. Unfortunately there are a lot of people giving horrible tax advice and telling everyone to become an S Corp regardless of their personal circumstances because they saw a Tik Tok video.”

But TikTok told me!

“It's not spending it on advice that could be free, it's hiring a tax professional to review your situation in detail (a critical element of effective and accurate tax planning) so they can provide the correct advice. There's also more protections for you (the consumer/public) when you pay a credentialed professional rather than making a bad decision based on YouTube/Reddit You joke but for many on this sub it's our livelihood. I'm guessing you aren't going to be giving aw”

You don’t need any liability protection?

“S-corp incurs more expenses than sole proprietorship - filings, payroll, bookkeeping, business tax filings, $800 franchise fee… It also takes up a lot more time with creating and maintaining binder with resolutions and other paperwork. These are things I didn’t realize until I got started. My bad for trusting that CPA who made a lot of money from my impulsivity and ignorance.”

“no, don't run payroll you'll have to call around. You're going to have a hard time filing an 1120S by yourself. dissolve now This is bad advice but you could file a $0 s-corp return for 2026 marking it "final" and report the business activity on your personal taxes on schedule C. Otherwise you're going to have to pay someone to file the 1120S with the 2026 activity. If you're using bank accounts & credit cards that are under the s-corp EIN it's probably unwi”

“When a State requires an in-state agent, usually best to find an online LLC Agent company and they will handle everything, at a cost of course”

“This is going to be something better suited for a tax or legal professional to really sink into, but generally yes. If you've earned income in any way through a business it will need to be filed. The 1065 form is going to be your friend here; pay attention to the "Final Return" box on page one that basically tells the IRS to stop expecting a return from your EIN next year as well.”

“Agreed the way §6654 is written only §31 withholding will satisfy the small amount exception. Annualized installment method could still help avoid the penalty depending on how OP's income worked out in each of the periods and could meet the 90% of current year tax safe harbor that way.”

“Yes, a commercial registered agent service is the standard fix and it is cheap, usually about $100 to $300 a year. You list their in-state street address as the registered agent on your state filing, they are staffed during business hours to accept service of process, and they scan and email whatever arrives, so their address is what shows up in the public state database instead of your house. A mailbox store box is a different thing: fine for mail and carrier deliveries, but most states will no”

“Some of the compensation paid to an S corporation shareholder-employee avoids payroll taxes though (SE health insurance, employer matching of 401(ks)s, SEP contributions, etc.) Also for someone like u/Organic_Hornet3326 , the S corporation may create a Section 199A deduction.”

I understand now. Thanks!

“If you make more than like 30-40k ish might be worth getting a professional.”

“You pay a tax preparer, if you don’t know how to file on your own. It is not cheap.”

Thanks!

“Might be worth it then, double check with whoever does your taxes but you could also consult a CPA but yeah no reason to be paying taxes on all of that as if it’s yours if most of it sayis in the company anyway. Might even go LLC taxed as a corp to save on the rigmarole”

“Odds are since you formed an LLC you need to file even if it’s zero profit, so it’s actually easier to pay the right amount. For all you know though, it sounds like you may not have even profited that much. Who took the LLC out?”

“Okay just going to be as concise as possible and not sugarcoat anything. I started a business this summer. It was stupid. It lasted 2 months, then we quit and we are shutting it down. (It was me and my partner and we had an LLC). We had a bank account under the LLC we put all the money into. We profited literally like a 2 thousand bucks not even. We were in way over our heads and now we dont really know how to close it and wind everything up. Since we earned like literal chump change, do we even”

“Okay just going to be as concise as possible and not sugarcoat anything. I started a business this summer. It was stupid. It lasted 2 months, then we quit and are currently trying to shut it down. (It was me and a partner and we had an LLC). We had a bank account under the LLC we put all the money into. We profited literally like a 2 thousand bucks not even. We were in way over our heads and now we dont really know how to close it and wind everything up. Since we earned like literal chump change”

“My understanding, at a low level, is that because of increasing revenues, I'll be running into negative Alternative Minimum Tax issues soon.”

“What are my options to open LLC in NY state if I don't rent or own an office or shop? submitted by /u/Senior-Age-6701 [link] [comments]”

“The Schedule C requires taxpayers to input a "business or professional activity" code which is separate from the line on the 1040 that asks for occupation. However, there is a business code for "other personal services" that fall outside of activities that don't have their own business code and many people use that catch-all "other personal services" for the type of work OP describes (the IRS instructions list all the business codes and most tax softwares also h”

“I run a small CPA firm. An estate attorney I use was with a national firm for a while before going out on his own, he specialized in asset protection. I have had clients who wanted complete privacy on some real estate they owned/were acquiring. He handles those no problem. Agree, if your national firm cannot handle this, that is concerning.”

“I believe you are looking for a “nominee service” where all public docs are filed in an attorney name each year then they step down and give you ownership of the LLC after the public docs are filed. I use this service for my larger entities.”

“How much should they be?”

Depending on the business, consider an scorp

Yes

“You’re right that it’s just tax code, and you pay a professional to help navigate it rather find “loopholes” - the IRS is not stupid. If income is mainly W2 income like that of OP, and you’re under estate tax limits, there’s not a whole lot of tax code to navigate anyway. You need pragmatic financial planning rather than tax planning per se.”

“I have an idea for a company that would be mobile retail similar to Snap-on or Matco. I’m writing out my plan but can’t get past the tax collection and remittance aspect. How would I collect the correct tax from a mobile retail location that spans multiple jurisdictions within a single day. Based on the trials versions I’ve run there’s no way to fool small business point of sale applications like Shopify, or Square into generating “online orders” that auto calculate the taxes to collect. Quick b”

Thanks for confirming what I was thinking!

“does it matter which job the extra $10/week is taken from? or is it good as long as i'm paying the correct total in taxes between the two jobs combined?”

“Lawyer for sure. if u cannot read P&L, Balance Sheet, or tax returns, u need a CPA as well. You want min 3 year tax returns (corp and personal).”

“Ahh that could work in theory but very dependent on the state, any engagement letter/SOW, and the specific circumstances. It's not uncommon to have a clause limiting damages to fees paid”

“No, it has to meet the IRS requirements. A key piece is that the company does not control them/provide any equipment, they are financially independent and do their own billing, and they should be performing the service for multiple clients. Whether the company is okay with it or not doesn't necessarily mean it's legal to do. I work in Accounts Payable and have been a part of 1099 audits. One past employer had to reclassify a contractor to an employee so this based on personal experience.”

“Was just wondering if i need to file these quarterly taxes if amazon is the one collecting the tax for the sale already. Got a letter about filing taxes but when i looked it up I heard mixed things, some said a single member llc can file it at the end of the year. I just want to know so I am not fined or anything. submitted by /u/Zestyclose-Egg4513 [link] [comments]”

“You should learn the diff between state and fed income tax. No state income tax in WA state, no filing of state income tax. I'm not saying a company doesn't need a license to practice in the state, but there isn't state income tax, period.”

“It sounds like you are comfortable with finance so you can probably handle the research for taxes yourself. I do my own taxes - S Corp, LLC, partnership, rental, investments. I do mine by hand, but I’ve used TaxAct a few times including last year. For S corps you really need to know how the 1120s works because the TaxAct questions will not lead you down the right path plus TaxAct is sadly lacking on the state side. Now watch the downvotes pile up!”

“Maybe talk to your current pronabout revoking the S-Corp election. If you aren't trying to pass the business to someone or something like that, then depending on the circumstances, may be time to review and see if being an S-Corp is beneficial to you anymore (assuming your S-Corp is an LLC).”

Could have negative income, and then it's actually ever more complex.

“Maybe for this year you try doing it yourself and then prior to submitting take your stuff to a pro to do a return and see what if any differences you find. Ask him to explain what you got wrong or perhaps what he got wrong. IF you and the pro got to the same numbers, try it on your own next year. If you got the same income and the same results as this year, you may be golden.”

“Should be. You seem savvy enough that I'm not going to try to tell you to keep your CPA. It is possible that another CPA would be better suited, though. OR, you could see what $4K includes. Is there an option for tax prep only? I make my living in this field and I don't even like doing my own taxes. I'd much rather help my clients with theirs. You might find that DIY isn't all it's cracked up to be. 😂”

“This is the real answer . The income doesn't change the complexity of the return .”

“I have never had good luck with ‘cheap’ professionals. I can’t drop the corp because my single client wouldn’t allow it, so I’m stuck with it but it’s not a bad problem to have :)”

“I would suggest shopping for a cheaper pro you could probably save a decent chunk. And since the s corp and the rental schedule prep fees are tax deductible you really aren't paying the full price in the end. I agree with the other commentor . S corps are still more complicated even if they aren't making as much. And it's always harder to fix mistakes after the fact. Maybe when your income drops enough where you could ditch the inc and just be a sole proprietor would be the time to d”

“Find a diy software that does corporate returns and prepare your own 2025 1120S from scratch without any of the resources from your tax pro (tax law updates, organizers, worksheets etc). Then do your 2025 individual return. If they are all functionally the same, then next year, before you look at anything from your tax pro, do the same, and if it matches the return they prepare, then maybe consider it going forward. When I say “functionally the same” I mean that you can disregard things like rou”

“Quick summary: I'm a semi-retired CTO who's been operating through an s-corp for many, many years. Back in the day, the business was doing 400k/year and much more in a good year. Now that I'm semi-retired the business is much simpler, with only about 60k of income annually + me on payroll and that's it. Personally, my wife works a w2 job and we have an AirBnb bringing in about 30k/year, plus the investment portfolio, etc. I have always recommended every use a CPA and try to optim”

“Solo owner of a small experiential staffing agency (GA). I pay my crew as 1099s and I'm a 1099 myself on some gigs. Revenue's grown to where S-corp, quarterly taxes, and real deduction planning are all on the table, so I'm after a year-round advisor, not just an April filer. Where I'm at tool-wise: I use BILL (bill.com) for invoicing and getting paid, and I'm leaning toward QuickBooks for the actual books and deductions. My formation company also pitches a bundled bookkeeping”