Bottom line ... the LLC may or may not be good for you from a tax standpoint, talk to your accountant about that. But for absolving you from liability if you screw up somehow, fugedfdaboudit.
|
Quote:
Kind regards, Quote:
Thank you! Quote:
Best Regards, Quote:
Have a nice week and weekend Steve! |
I actually am going through this right now as well. Had a movie company since 2001, which was more a hobby company up until about a year ago when I started getting back into it film making. This year I always planned on turning into an official company, I trademarked it in July and got all my IRS stuff back a couple weeks ago. So far we've started on 2 movie projects and did some After Effects/Premiere work for 1 client.
Being in IT as well, it opens up some new avenues that a typical film/video production company wouldn't have. In working on my projects I've written several C# apps to assist in my productions. Technically I could start selling them under my LLC. For me forming the LLC was mainly for legitimacy with clients and to open you up to quite a bit more deductions. Like my camcorder or other equipment purchases. I think it's an amazing time to be alive. Being born in 1985, I have been able to grow from my dad's Tandy 1000 connected to a local BBS when I was 5 years old to an 8 Core system connected to the whole world and being able to share stuff I come up with. |
Quote:
|
In the US an individual/sole proprietor has only 25 deductions he or she can write off while an LLC has 200 deductions. My CPA was going over all of them, it's not for everyone, but it certainly will help me next year in Tax returns.
|
Quote:
In fact, a sole proprietor has a lot of tax advantages over an individual forming an LLC. Here are a few: 1. Easier taxes (which means less hours, or a lower tax perparation bill) 2. You can hire your kid and pay no payroll tax (also - your kid's first $5000 of pay isn't subject to federal income tax, plus in my state it means no unemployment tax) 3. Health Reimbursement Arrangements (HRA) - make your spouse an employee and reimburse him/her for your family's health insurance premiums. It may sound confusing, but this is a $5,000 a year tax benefit that is available only to sole proprietors. As far as legitimacy with clients... I've never had a single client ask me what kind of business structure we have. |
I don't recall what deductions are available for an LLC, my CPA went through them briefly. I don't know a lot about it yet, I just got a CPA about a week ago.
My big question I have now, not to steal this thread is what is considered "active" from the IRS's perspective. This year I had a ton of startup costs between getting a new camcorder to new computers, servers etc. I was actively filming 2 movies throughout the year (starting in January through till October) and during the month of November and December I was working on a Client project. |
Quote:
If you already have employment and start a business which shows no profit over time, the IRS sees this as an attempt to fund your hobby via an illegitimate business front. As Chris mentioned, an LLC was not right for my business as well, remaining a sole proprietor far outweighed forming an LLC. And as far as legitimacy with clients, in my book this has nothing to do with being an LLC or what have you, and everything to do with building relationships! All the Best! |
All times are GMT -6. The time now is 09:05 AM. |
DV Info Net -- Real Names, Real People, Real Info!
1998-2024 The Digital Video Information Network