Is it possible to have a two member LLC and hire employess to do everything and then not have to pay self employement tax on the amount passed through to the 1040 via the k1?
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LLC-pass through
What type of tax return would the LLC file? C Corp. form 1120, S Corp. form 1120S,
Partnership, form 1065, Sole Proprietor Sched. C?
C Corp. a salary would be paid to the owners, with a W-2 issued at end of year. Payroll
taxes would be deducted from the salary.
SCorp.-owners receive salary with payroll taxes deducted. Any additional profit would be
reported on K-1 not subject to S E Tax.
Partnership. General Partner would pay S E Tax on the reported earnings from the K-1,
Sole Proprietor-Sched. C all net earnings subject to S E Tax. -
Llc
I don't think it would fly to avoid SE taxes if lets say they file form 1065.
After all the member make the management descisions and hire the employees, probably sign all papers, checks, etc. Talk to banks. They should have some guaranteed pay.
Is no different then for S-Corps.Comment
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