I am the majority owner of an LLC. Can my LLC pay my personal tax bill for me? I don't want to pay taxes from my take-home pay.
2007-08-15 11:05:30 · 5 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
I'm assuming that you're a member of a multi-member LLC. If your LLC has opted to be taxed as a corporation then anything that it pays you is wages (aside from capital withdrawals but that's another story entirely) and is fully taxable to you as ordinary income.
If it's treated as a partnership it will file a Partnership Return on Form 1065 and any income will flow directly to the partners' personal tax returns. If the LLC paid your personal tax bill it would not be a deductible business expense and all partners would therefore share in the payment of your tax bill.
2007-08-15 12:12:09 · answer #1 · answered by Bostonian In MO 7 · 0⤊ 1⤋
Your employer is required to withhold and pay taxes on your salary. The amount you pay is based upon a percentage of your gross salary. If you still owe taxes when it comes time to file and pay (or get a refund), you can ask your LLC for a one-time distrubution to make up any difference you might owe in taxes. The check should be made payable to you and you, in turn, must pay whatever taxes are still due. Be warned, though, that these monies might also be considered as income. It's just easier to follow the system when it comes to paying taxes. What you're interested in doing here is keeping yourself out of trouble with the IRS and with your state's tax authority.
2007-08-15 18:13:32 · answer #2 · answered by Richard B 7 · 0⤊ 0⤋
Make a capital withdrawal to pay those taxes is the only legal way.
2007-08-15 19:50:00 · answer #3 · answered by dadw5boys 4 · 0⤊ 0⤋
Your LLC is a separate entity. It files its own return. It is not you. YOU pay your taxes.
2007-08-15 18:33:16 · answer #4 · answered by Anonymous · 0⤊ 3⤋
You can't take a deduction for personal expenses.
2007-08-15 18:18:05 · answer #5 · answered by Judy 7 · 1⤊ 0⤋