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You can set up your company as an LLC because you will have more flexibility
Since you are a single owner it will be easy for you to maintain
For tax purpuse if you set up your business as LLC you will avoid the double taxation
Would have your anwser been any different if my father was also a managing member or shareholder?
If your father is a member you will have a tax advantage too because you can allocate the profit or loss between the members.
Now, remember that if you have profits you will have to pay self-employment taxes
But, the company won't have to pay taxes on the profit ( you will avoid the double taxation)
If you are going to be 100% the sole owner you will use schedule C to report your expenses and income. If you are going to have at least two member you will need to fill out form 1065 (partnership)
My father may Finance the company vehicle for me due to his stronger credit score,personal financing may be an option also. In the case that he is the financer, he would have to become a managing member. If he becomes a managing member, which would be fine with me, i want to provide him a small salary, but for tax purposes, is there a certain amount of money i should stay under to benifit him on tax day?
Your attorney is correct the LLC is better for you
He is not asking for anything, but the purpose he is helping me save money, i want to take care of him in at least a small way.
Does he gets social security or any other type of retirement?
Instead of payroll you can also give him part of the profit, 10% of the profit that way he won't have to pay taxes on the salary and the profits.
not for another 18 months, he is 60.
ok, that may be a good idea.
You will do an owner draw
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Owner Draw, got it. ty. Do you think its a good idea to have my father finance for me right off the bat getting my business started if its going to get me a improved interest rate? Or get personally financed with a higher interest rate, but start improving my credit. My wife feels that i should start with my father and then once established, start doing it ourselves. Agree or disagree in general?
his credit is 850, mine is 620
If you will save money and your dad is helping you, you can give him part ownership, or you can tell him to finance the cars for you and make payments to him, just make sure he gives you a note in case the IRS audit you
note? can you explain quick. ty for your help
You can tell him that you will need a note explaining that he will lend you the money to start the business and that you will pay him back either monthly, quarterly or annually, this way you can justify before the IRS those payments.
ty for your help, i am done.
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