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We prepare most type of tax returns:

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S Corporation.

C Corporation.

Partnership.

Payroll.

Amended.

Gary Bode, CPA is a Master's Degreed, nation wide accountant offering tax and business services. Member of AICPA and NCACPA. Our virtual office provides excellent service to long distance and international clients. Call (910) 399-2705 for a free phone consult.

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We short sold our home in 2014 and were concerned with the repercussions from the cancelled debt. We did a lot of research on the internet and were able to find Gary.  He provided a free consultation and let us know that we should be do.  Due to his expertise, we went from thinking that we would owe a significant amount of money to actually receiving a nice refund.

We would recommend Gary to anyone who finds themselves in a similar situation.  He’s very knowledgeable on the process and explains everything with you once he’s completed your tax forms.

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Even though Gary enjoys helping colleagues, we no longer provide free consults to other tax preparers. He's happy to consult on an hourly billing basis if our schedule allows.

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Limited Liability Company CPA discusses IRS Taxation Options | LLC Tax

Limited Liability Company CPA discusses LLC tax options

Gary Bode, CPA: There’s a reason why LLCs are so popular. For a free initial phone consult, please call 399-2705.

Limited Liability Company CPAs see the LLC touted as the business entity of choice. But the choice of business for entity depends on multiple factors. Note that LLC is a unique type of business organization allowed under state law. First used as holding companies for real estate, they’ve become popular for the limited liability they can offer each Member. If the LLC is sued, each Member is only liable for what they’ve put into the LLC. But a good lawyer can still attach to the Member’s personal assets under some conditions which aren’t addressed here. I’ll deal with IRS taxation issues which must be considered with any business startup.

“The IRS allows a Limited Liability Company to choose how it wants to be taxed.”
– Gary Bode, LLC CPA

So, how can my Limited Liability Company be taxed?

Single Member Limited Liability Company – SMLLC

This is the default IRS classification for a LLC with only one Member. However it can be taxed as a C Corporation or S Corporation as well. Your SMLLC is a sole proprietorship, but the LLC adds a layer of legal protection should the company be sued. Your Limited Liability Company’s CPA files Schedule C, Profit or Loss for Business, along with your personal Form 1040. You pay income and self-employment taxes on the profit from Schedule C. See the S Corporation section below for a nice loophole around this self-employment tax.

Partnership LLCs

Partnership is the default IRS classification for LLCs with two or more members. This is a very flexible entity. Profits, losses and equity can be re-allocated at will. This makes attracting investors and accommodating the changing needs of current Members easier. The Limited Liability Company’s CPA files Form 1065, U.S. Return of Partnership Income. The LLC incurs no tax per se. But profits, losses and equity flow into each Member’s Schedule K-1. And that information then flows into each Member’s Form 1040. Partners can’t be paid as employees, so profits and distributions are subject to self-employment tax.

C Corporation

Your Limited Liability Company’s CPA files IRS tax Form 8832, Entity Classification Election, to request being taxed as a C Corporation. This action makes sense in two cases 1) as the initial step to becoming an S Corporation and 2) if the LLC might go public in the future. C Corporations are double taxed.

S Corporation

Here your LLC’s CPA files Form 2553, Election by a Small Business Corporation, after approval of Form 8832 mentioned above, to turn the LLC from a C Corporation into an S Corporation. I know it seems convoluted. Distributions from S Corporations are not subject to self-employment tax. Which can be a nice cash flow advantage during LLC startup. S Corporations aren’t double taxed either. But they lack the flexibility of a Partnership for attracting new shareholders or adapting to current shareholder’s changing needs.

We’re a Wilmington NC Limited Liability Company CPA firm. Our virtual office allows us to provide excellent service to long distance clients. For a free initial phone consult please call (910) 399-2705

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