Handyman LLC Vs. S Corp (Let's weigh the benefits). When you are doing handyman taxes what is the best tax structure to set up your handyman business as? Should I be an LLC , S corp or a Sole Proprietor? In this video we break down the pros and cons to a handyman llc, S corp and sole proprietor. Which is best for handyman business taxes?
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Video Chapter Titles:
00:00 Business Structure for Handyman Businesses
Choosing the right business structure is crucial for handyman businesses.
Understanding LLCs, S Corps, and proprietorships and their tax implications is important for business growth.
00:14 LLCs Explained ️
LLC stands for Limited Liability Corporation.
It separates personal assets (house, car) from business assets, shielding them from lawsuits and debts.
LLCs offer pass-through taxation, where business profits and losses directly affect the owner's personal tax return.
01:23 S Corp Tax Advantages
S Corps offer potentially lower tax rates compared to LLCs.
LLC owners pay self-employment tax (15.3% covers Social Security and Medicare).
S Corps pay a flat corporate income tax rate (currently 21% on all profits).
S Corp owners can pay themselves a salary subject to payroll taxes (generally lower than self-employment tax).
Owners can also receive dividends taxed at their individual tax rate, which can be lower than income tax rates.
03:15 Choosing the Right Business Structure
There's no one-size-fits-all answer for the best business structure (LLC, S Corp, Sole Proprietor).
The best choice depends on your income level, growth potential, and comfort with complexity.
State taxes can also play a role in the decision (e.g., California has an annual $800 LLC fee).
04:11 Consult a Tax Professional
It's crucial to consult a tax professional (CPA) before making any financial or business structure decisions.
A CPA can help you understand your specific situation and recommend the best option for you.
9 июл 2024
