1099 Tax question: Expenses

But would it not be a good idea to make your own LLC, Have the company pay your LLC, then you pay yourself with a W-2 from your LLC?

 

How many times does this have to be explained.

An LLC means nothing for taxes.

On a 1099 you are a sole proprietor. You file a Schedule C when you file your personal 1040. That’s where you file business expenses. I haven’t btw sole proprietor in over 20 years so I don’t know if you can deduct meals there.

I was an S Corporation and an employee of that corporation. Per diem can be paid to an employee. That number is usually higher than actual meal expenses

 

You’re contradicting yourself in your own post.

there’s TWO relevant advantages of an LLC filing as an S-corp in the tax law.
1) You can take per diem.
2) you can take any net income above a normal driver’s wage as didvends, which saves the self employment tax of 15-something %.

Between the two, it’s conceivable to reduce the tax bill by $15K if you’re doing well.

 

I’m not contradicting myself. There is no special tax form for an LLC. You are either Sole Proprietorship or an S-Corp.
LLC state specific category which is supposed protect your personal assets if you or your company are sued. There are discussions around this forum as to there effectiveness

 

I’m sorry, but there are, indeed, specific tax forms for an LLC.

Moreover, NOT ALL LLC’s are pass- through entities. If you elect to be taxed as an s-corp (form 2553) the income from the LLC (reported on your CORPORATE TAX FORM 1020 S) and your share, reported on form K-1, passes straight through to your personal taxes, reported on your 1040 Schedule E . If you file to be taxed as a sole proprietor, the business gets reported on a schedule C. If you elect to be taxed as a C-Corp, the LLC files the corporate tax forms, pays corporate taxes (including corporate income taxes) and pays any remaining profits as dividends. The individual would then report that dividend income and pay taxes on that income (double taxation).

finally, if you elect for your LLC to be taxed as a partnership, you need to fire your accountant and have your head examined……..

 

Sorry but those are not LLC specific tax forms. Those are business or corporate tax forms. You can form a business and operate with or without being an LLC. As I said above, an LLC is a state not a federal entity that separates the owner's personal assets from the business in case of a lawsuit.

The first paragraph from the link below.

A Limited Liability Company (LLC) is a business structure allowed by state statute. Each state may use different regulations, you should check with your state if you are interested in starting a Limited Liability Company.

Limited Liability Company (LLC) | Internal Revenue Service

 

You have made a number of false and misleading statements.

“on a 1099 you are a sole proprietor”.
“You are either a sole proprietor or an s”
“An LLC means nothing for taxes”
“There’s no specific tax form for LLC”

Please refrain from giving people advise on taxes, especially when you admit “I don’t know if you can deduct meals there”.

that’s a $10,000 tax deduction difference between LLC -s and filing as a sole proprietor.

Have a good day.

 

I think we are arguing two different points.

What is the difference between a normal business and a LLC for federal tax purposes?

If you are a O/O or a lease purchase what tax benefit does Accidental Trucker LLC get that Accidental Trucker does not get?

In either case you decide how you want your business to be taxed.

Thanks for your thoughts, I am having a great day.

 

Yes you are correct but you haven’t shown a difference between a normal business and your LLC for taxes. Both would pay the same. My original point was there is no need to pay to form a LLC in order to take be taxed as a business