Linsey 05:51 PM 10-06-2015
A friend and I are opening a day care in her home. How do taxes work and should we open an LLC? Will she benefit from the tax write offs? Please help with how this works.
Thank you!
Michael 12:04 AM 10-07-2015
TomCopeland 11:40 AM 10-07-2015
Originally Posted by Linsey:
A friend and I are opening a day care in her home. How do taxes work and should we open an LLC? Will she benefit from the tax write offs? Please help with how this works.
Thank you!
Yours is a complicated question. There are several different types of LLCs. If you set up a single person LLC, you will be taxed in the same way as if you were a sole proprietor (self employed). If you set up a partnership LLC or corporate LLC, then the tax forms and different. Essentially, you won't save any money on your taxes as a corporation unless you make at least a $30,000 profit each year.
I don't recommend doing an LLC or a partnership. I recommend that the owner of the house where you will do child care be self employed and hire you as her employee. I've written a lot about this on my website:
http://tomcopelandblog.com/category/...urance?cat=935