How much tax?

[Marcie]

I have an LLC and I want to make sure I am setting aside enough of my profit to pay the corporate taxes associated with the revenue from a muse. Is there any general way to calculate this???

TIA!

[Vacman]

Marcie,

Great question! I also have an LLC, and am not sure how much to set aside for taxes either.

If anyone knows I'd really appreciate any resources/information you have on the topic.

Thanks!

[wildsoul]

Dunno about your state, but here in CA we have a minimum corporate tax of $800. I bank on paying that, then try to write off everything else by the end of the year. As long as you don't carry over a lot of profits at year end, there isn't usually a lot more tax due. (I'm an S-corp.)

[wildsoul]

Oh...and don't forget your employment taxes. But the Feds would have you on a set reporting schedule for that. (Estimate up to 15% for employment taxes if you have to pay workman's comp, around 10% if you don't.)

[Marcie]

ok, my situation is a little different because I had a pre-existing LLC that I am running my muses through. So basically my LLC writes me a check, and I need to set aside $ to pay my personal tax bill in April. I plan on leaving 20% profit in the LLC to cover things like corporate tax, accounting, etc. and to use to bankroll future muses ;) HTH & thanks wildsoul!

Edited to say: We try to drain most of the $$ out of the bank account at the end of the year (via end of the year bonuses) b/c our accountant says that keeps us from paying extra corporate tax. I suppose it may vary by state...

[PhoenixDown]

You should look for a good accountant.

[Marcie]

You should look for a good accountant.

was that directed at me? why?

[RichB]

In my opinion it's too important not to seek professional advice on. It depends on profitability and what you'll claim as expenses. I have an S Corp for years and have never owed taxes, it's always netted me more money back from what I've been able to claim. But that's cuz I talk to a good acct...

[makewon99]

do you own the whole LLC or is there a second member? if you are a single member LLC to the IRS it is called a disregarded entity for tax purposes. all payouts are subject to self-employment taxes. if however there is someone holding 20% intrest in the LLC some law experts there are ways around this http://www.nysscpa.org/cpajournal/2006/606/essentials/p32.htm
however you can select an s-corp election for your LLC which means you will need to pay a resonable salary to your self however it will remove the self employment tax issue also the company ADP at WWW.ADP.COM will do your salary and tax reporting duties. however you still need to talk to a good cpa for any further info good luck.