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Video instructions and help with filling out and completing Form 8453 S Entities

Instructions and Help about Form 8453 S Entities

Music hi brand Avis with David CPA group. Again, I want to talk to you all about LLCs (limited liability companies). I talked before about different types of entity structures and I want to talk a little bit more in-depth about limited liability companies. A limited liability company, which is an LLC, is an option that you have when starting a business. It is used to isolate some of the liability you have as a business owner. Many people start off as a sole proprietorship, meaning that they are the sole owner. For example, if I'm starting a carpet cleaning business called "Brandon Davis's Carpet Cleaning," I may operate under my personal name and personal tax ID number (which is usually the social security number). As a sole proprietor, any positive or negative outcomes reflect directly on me personally. However, a limited liability company allows me to separate my personal liability from the business. It creates a separate legal entity with its own identity, called an LLC. Instead of using my name for the business, I can use "Brandon's Carpet Cleaning" followed by the phrase "LLC" to indicate that it is a limited liability company. To establish the LLC, I would need to submit paperwork to the Secretary of State's office, which is something an attorney can help with. This paperwork officially establishes the LLC and provides liability protection. As the owner of the LLC, I have complete ownership of the business. While an LLC offers liability protection, there are also tax implications to consider. If I had continued as a sole proprietorship, all net profits from the business would be subject to self-employment taxes, in addition to regular income taxes. To address this, I can make an election with the IRS to change the tax treatment of the LLC....