Company Tax Decision: Passive vs Earned Income

I love your vids I'm addicted!!!

I loved the separation between rents and royalties to selling products or services. Great video, thanks =)...

Thnx lee

Thank you for the knowledge and for not trying to sell me some book

Good information, as well as presentation. Valuable video, appreciate you!

Wow I cannot believe how easy and clear you explained. Thank you so much for making this videos. I know this one is from 2014 but Wow it is a excellent information.

Great video. I'm looking to start a self publishing business this year in NYC - I will be placing my book on multiple platforms: Amazon, Apple iBooks, etc.. Along with a corresponding Zazzle store (coffee mugs, blank journals, pens) Under a single person LLC structure - should I choose subchapter S status?

My friend recently formed an LLC for a cannabis cultivation company and I am investing in the company and he wants to form a partnership at 51/49%. We are not starting until April. I'm wondering what him and I will need to do to form the partnership and which the best route is. It's a big building, so income will be a bit high. Thanks for your help.

Can a single member LLC elect to be taxed as a partnership?

I run a retail store online (ecommerce) selling physical products (home furnishings). Based on your videos I've determined that I should set up an LLC vs. the Sole Proprietorship I have in place now for asset protection. However, I'm still struggling with the question of how to tax it. I make earned income, but currently that income number is still small (the company is only generating about $20,000 in revenue per year and maybe $5,000 in net profit). Based on your videos I would select an S corporation structure for taxation, but I wouldn't be able to pay myself a "reasonable salary" because the company isn't making that much money yet. Am I jumping the gun in setting up the LLC? Should I continue operating as a Sole Proprietor until the company is more profitable? I was planning on setting up the LLC as a partnership with my wife for the added asset protection. Thank you in advance for your assistance.

chumgypsy, I'm afraid not. As the only owner and employee, your business would be taxed as a sole proprietorship (unless you choose to have it taxed as an S or C Corporation).

I have learned more in 30 minutes of watching several of your videos than hours and hours of trying to find a straight answer elsewhere! I will be opening a service based company. My wife will be listed as co-owner, though will have a separate career. For the first two months of operation I will be the only employee, until we open for business. I will then hire two part-time employees. I have decided to form an LLC and file taxes as an S-Corp. Does this sound correct to you? Thank you again for sharing your knowledge!

Hello Mr Phillips - excellent videos.  If a business earns income through real estate sales where the buyer pays a down payment and then makes monthly payments until the balance is paid off (let's say $300 down and $100 monthly for 50 months), would this be passive income?  Would you suggest to structure the business as an LLC taxed as a partnership? Thank you.

Great video! Can my passive income marketing business be taxed as a partnership if I am the only owner and employee?

Hi Lee, thank you for your video. What would you say is the different between a LLC tax as a S Corporation and a S Corporation Thank you for you answer

hmm..what if you're just wholesaling properties( and don't plan on holding any of them)...basically buying and selling really quickly... I would have "earned" that money via assigning the property to a buyer..can i assume this should be an LLC( single member..just me) via S-Corp tax? ( especially since wholesaling properties can easily net from $5K or more per transaction.

Only 23K views on all this valuable education smh

Lee, If I have an LLC that is a food vending company, so earned income. And, I'm partnered in it with my wife, 50/50. She will only be helping on a limited basis. Can my salary be much higher than hers even at 50/50 ownership? And can we still file as an S Corp? Thanks.

My wife an I are wanting to set up an LLC and we are trying to decide how we should have it taxed. We will be making earned income and were thinking of choosing S-Corp filings, but some people I've seen said they are waiting to file as an s-corp until their business brings in more money. Is this a better option? Should we file as a partnership until our business is making a lot of money?

Hello Sir. I really appreciate you taking the time to make this videos for as new entrepreneurs. I created an LLC and applied of S-Corp status to do E-Commerce, now I'm ready to start my next one underneath my S-Corp to do transportation. Can I also apply for the S-Corp status on the second company or am I ok just leaving it as an LLC without the S-Corp? Please help us... I'm trying to make an Umbrella Second topic My first LLC with the S-Corp I think is not so much at risk for now since it's small, no much money comes through that one yet. In the other hand I make most of my living as a driver. Can I get a way insuring just my second LLC? If so would the insurance cover my car to be driving? Or do I need to insure the car separately? Or do I need to insure both of the LLC's? I thank you in advance for your answers