If your company creates a side business, you'll definitely want to consider structuring it as a limited liability company (LLC) owned by you. You'd enjoy multiple tax benefits, such as:
• You can deduct your share of losses on your personal tax return. If you hold a 25 percent interest in an LLC, for example, and the LLC incurs a $400,000 loss, you can qualify for a $100,000 deduction.
• You won't pay corporate income tax when the business turns a profit. An LLC, like an S corp or a partnership, isn't subject to the corporate income tax.
• Your personal assets will enjoy the same liability protection as they would if you incorporate your company.
• You don't need to meet all the criteria required of S corps. For example, you can select a foreign co-owner.
Shelter your SE taxes
Finally, an LLC can provide shelter from self-employment taxes. For example, say your self-employment income is subject to s...(register to read more)