Have a Tax Question? Ask a Tax Expert
Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.
Will you be the only owner of this LLC?
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
So, essentially you would be losing no "fringe benefits" by becoming an LLC
It's the same - it's disregarded for tax purposes
You only have a partnership if there are 2 or more members
Yes, my wife will be my partner.
Okay, then you would file a partnership tax return
Right, so what fringe benefits am I losing by filing as an LLC vs a C-corp?
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
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
Yes, you can do that regardless if you are an LLC/Partnership or C Corp
With business travel, you can write off 100%
it's meals and entertainment you can only write off 50%
Wow, thank you. So that means that my hotel stay and flights are 100% tax writable?
if for business purpose
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
And since my business is traveling, then it will always be business right
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
does that make sense?
But you could still write off all the airfare
So, you're in better shape than you thought, huh?
Much better thank you.
Do you have any further questions?
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
How would I differentiate a vacation from a business trip when my purpose is to show future reps the trips that was taken?
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
Well, you would have a meeting with prospective clients, sales leads, or marketing contacts. You would speak at engagements, etc
You can't just go to Hawaii and put a few flyers out then claim that it was for business
Thank you. No more questions, you were excellent.