Taxation Services for Limited Liability Companies (LLC) in Walnut Creek
Serving the areas of Berkeley, Concord, Oakland, San Ramon and Walnut Creek
Overview of Limited Liability Companies (LLC)
Limited Liability Companies have a hybrid business entity which possess certain characteristics of both a corporation and a partnership or sole proprietorship. An LLC, is not a corporation. The primary characteristic an LLC that is similar to a corporation is limited liability, and the primary characteristic it shares with a partnership is the single level taxation or pas-through income. It is more similar to an S-corporation, than a C-corporation. It is more suited to certain industries than others.
LLC’s do not have many formalities to maintain. Like any other business, the comingling of personal and business assets should be avoided. Membership interests in LLCs and partnership interests are also afforded a significant level of protection. LLC’s can have single members (SMLLC) which is similar to sole proprietorship, or multiple members with is similar to a partnership.
Tax Preparation for a Limited Liability Company
For U.S. federal income tax purposes, an LLC is treated by default as a pass-through entity. If there is only one member in the company, the LLC is treated as a “disregarded entity” for tax purposes, and an individual owner would report the LLC’s income or loss on Schedule C of his or her individual tax return. Thus, income from the LLC is taxed at the individual tax rates. The default tax status for LLCs with multiple members is as a partnership, which is required to report income and loss on IRS Form 1065. Under partnership tax treatment, each member of the LLC, as is the case for all partners of a partnership, annually receives a Form K-1 reporting the member's distributive share of the LLC's income or loss that is then reported on the member's individual income tax return. In contrast, income from C-corporations is taxed twice, once at the corporate entity level and again when distributed to shareholders, thus more tax savings often results if a business formed as an LLC rather than a C-corporation.
States may have different tax and fees on LLC’s. For example, in California, there is a minimum $800 fee and it can be greater depending on the total revenue of the business. Careful analysis should be done for a business to choose between an s-corporation and an LLC as one entity generally is a better entity for your specific business with more benefits to offer.
Bookkeeping for Limited Liability Companies (LLC)
Having an effective accounting or bookkeeping system in place helps significantly to better plan & minimize taxes and prevent unnecessary audits. Capital Tax & Accounting works exclusively with businesses, and as a result understand the needs of Limited Liability Companies. Below is a list of services that are offered to our business clients:
- Monthly Accounting and Bookkeeping
- Income Tax Preparation & Planning, including quarterly tax estimates
- Payroll services
- Business owner services such as exit planning, startup issues, succession planning, retirement planning, wealth transfer
- Sales tax filings
- Property tax filings
- Unlimited discussion of your routine business questions with no additional fees
- Other services specific to your industry