Ask HN: Joined a startup? Your taxes are about to get complicated. Questions?

Re:Ask HN: Joined a startup? Your taxes are about to get com... by brntsllvn on Tuesday April 18, 2023 @04:52PM (#35619937)

Great resource: https://www.linkedin.com/in/markjkohler/ follow him and learn

Biz tax is a deep topic. Short answer is the LLCs are passthrough, which means you'll receive a k-1 from your accountant that you include in your personal return.

Quick strategy tip: have your accountant apply for S corp status for your LLC. You'll pay less tax right away.

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Re:Ask HN: Joined a startup? Your taxes are about to get com... by jawmes8 on Tuesday April 18, 2023 @05:46PM (#35620757)

Can an S corp be single member? What are the drawbacks to using an S corp as opposed to an LLC?

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Re:Ask HN: Joined a startup? Your taxes are about to get com... by brntsllvn on Tuesday April 18, 2023 @06:51PM (#35621565)

S Corp is just a tax filing status. Your legal entity remains an LLC.

The benefit of S Corp tax status is that you pay yourself a dividend in addition to your income. They are taxed differently.

The drawback is you now have a payroll obligation.

An LLC can be single member. An LLC with S Corp tax status cam also be single member.

There's a lot of info about S Corp status online. Hopefully this puts the strategy on your radar for more investigation.

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Re:Ask HN: Joined a startup? Your taxes are about to get com... by jawmes8 on Tuesday April 18, 2023 @08:26PM (#35622537)

Thank you! That is helpful to know.

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Re:Ask HN: Joined a startup? Your taxes are about to get com... by psyklic on Tuesday April 18, 2023 @08:19PM (#35622483)

Note if in CA, passthrough LLCs (including no-income) must also file Form 568 by March 15 and pay a mandatory $800 annual fee by April 15. (Electing for another taxation method could have slightly different requirements.)

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