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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15588
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I am thinking of starting an LLC around a MLM I joined. I

Resolved Question:

I am thinking of starting an LLC around a MLM I joined. I would like to receive taxable fringe benefits such as writing off the mileage I place on my car, taking potential reps out to lunch, traveling (cause that's what we sell) and anything else that a regular C-Corp offers. I was wondering if an LLC would be appropriate if I chose to form it as a partnership and what fringe benefits am I actually giving up if I do it this way?
Submitted: 1 year ago.
Category: Tax
Expert:  Megan C replied 1 year ago.

MyVirtualCPA :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

MyVirtualCPA :

Will you be the only owner of this LLC?

MyVirtualCPA :

If so, when you form the LLC there is no difference in how you treat the income and expenses than you would without an LLC

MyVirtualCPA :

So, essentially you would be losing no "fringe benefits" by becoming an LLC

MyVirtualCPA :

It's the same - it's disregarded for tax purposes

MyVirtualCPA :

You only have a partnership if there are 2 or more members

Customer:

Yes, my wife will be my partner.

MyVirtualCPA :

Okay, then you would file a partnership tax return

Customer:

Right, so what fringe benefits am I losing by filing as an LLC vs a C-corp?

MyVirtualCPA :

None

MyVirtualCPA :

You can still write off any expense - it's actually better because with a C Corp you're taxed once on the income when you earn it, and again when you give it to yourself

Customer:

The business have to do with travel. I want to ensure that if I travel I can write off half of my trip because it will always be business

MyVirtualCPA :

Yes, you can do that regardless if you are an LLC/Partnership or C Corp

MyVirtualCPA :

With business travel, you can write off 100%

MyVirtualCPA :

it's meals and entertainment you can only write off 50%

Customer:

Wow, thank you. So that means that my hotel stay and flights are 100% tax writable?

MyVirtualCPA :

Yes

MyVirtualCPA :

if for business purpose

MyVirtualCPA :

If you travel and then go on vacation after you travel, then only the portion of your trip attributed to business can be written off

Customer:

And since my business is traveling, then it will always be business right

MyVirtualCPA :

As long as you are conducting business. Now, if you and your wife go on a sales lead in Hawaii and stay an extra 5 days, then the 5 days of hotel would be personal

MyVirtualCPA :

does that make sense?

MyVirtualCPA :

But you could still write off all the airfare

Customer:

Yep.

MyVirtualCPA :

So, you're in better shape than you thought, huh?

Customer:

Much better thank you.

MyVirtualCPA :

You're welcome

MyVirtualCPA :

Do you have any further questions?

Customer:

I just don't want to think that any trip I have taken and used it for experience, advertising, and marketing is not considered business

Customer:

How would I differentiate a vacation from a business trip when my purpose is to show future reps the trips that was taken?

MyVirtualCPA :

Well, you have to conduct business, so keep a logbook of what you do on your travels. Who you meet with, where you go, etc

MyVirtualCPA :

Well, you would have a meeting with prospective clients, sales leads, or marketing contacts. You would speak at engagements, etc

Customer:

Oh. Ok.

MyVirtualCPA :

You can't just go to Hawaii and put a few flyers out then claim that it was for business

Customer:

Thank you. No more questions, you were excellent.

Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15588
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and 6 other Tax Specialists are ready to help you
Expert:  Megan C replied 1 year ago.
Thanks Jamarr for your positive rating. Please come back and visit MyVirtualCPA for any of your tax, finance, or social security needs. It was a pleasure working with you today.

In a couple of days you may receive a short survey. I would appreciate it if you would fill the survey out favorably, as it will assist me with my rankings on the site. Thanks again!

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Megan C
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Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level