Hey tax gurus need your help!!
#11
My wife and I started an LLC flipping homes and she's also a new real estate agent. We went to tax guy and realized we'll get hammered with taxes. I know lots of my fellow pilots have side businesses (including real estate investments). Looking for some practical advice on how to limit our tax exposure. Thanks in advance!!
Here is my cliff note version of advice.
1. Have an attorney who knows about LLC's set up your articles of incorporation and by-laws. You can get an LLC from the state very easy by yourself, but the real value of the LLC is in those articles and your by-laws which are usually specific to what you are doing and trying to accomplish. The boiler plate version from the internet or Legal Zoom isn't a good choice.
2. Use a CPA who deals with small business's and understands LLC's. Use Turbo Tax to do your teenagers taxes.
3. Get a checking acount and credit cards in the LLC's name and NEVER use either of them for personal use. Make sure you classify any money that comes to you as a capital distribution. This is the first place any attorney will look if you ever run into a liability issue. Your personal assets WILL NOT be shielded by the LLC if you have ever used any of the funds in the LLC for personal use. Be very nerdy and accountant like with your money. Quicken or Quickbooks is a MUST.
4. Have an annual LLC meeting and record the minutes of that meeting.
5. Don't forget to annually renew your LLC certificate with the state.
6. If your business grows big enough or has significant assets, have an attorney that deals with estate planning work that into your will. It becomes complicated when deeds become involved. You want the LLC to "live" after any owners for tax purposes. You do not want it to be probated.
7. Pay people for advice. APC and Google can a bad thing for advice on an LLC.
Last edited by RockyBoy; 02-22-2018 at 02:25 PM.
#13
Find a guy that will listen to you and not act like you know nothing about taxes. I call my guy all the time with stuff like, "Hey I want to put in a sprinkler system for my yard. How should I do it so I can write off half of it as a farm expense?" He'll tell me to tie it into the irrigation system for a field and to replace or do needed upgrades on the farm system while I'm at it. I'm sure with a house flipping business there are lots of business expenses that could benefit you personally.....just be able to justify them to the IRS.
#15
Not trying to win bonus points, just trying to lower the tax bill. If you have ever spent time running a business and dealing with other business owners and CPA's you would be surprised to see what people write off as a business expense. Trashy isn't a legal term. If it fits within the IRS guidelines and tax law rulings, you write it off. Why wouldn't you?
#18
My wife and I started an LLC flipping homes and she's also a new real estate agent. We went to tax guy and realized we'll get hammered with taxes. I know lots of my fellow pilots have side businesses (including real estate investments). Looking for some practical advice on how to limit our tax exposure. Thanks in advance!!
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