What to Know About LLCs with Mark J Kohler CPA, Attorney | 2019

What to Know About LLCs with Mark J Kohler CPA, Attorney | 2019


Hey, welcome everybody to this week’s Facebook live and we’re talking about LLC’s limited Liability companies that’s not limited liability corporations Now I know some of your like I know everything I need to know about LLC’s I went to Legal Zoom and set it up or LLC’s are easy. Whoa. Whoa. Whoa at our law firm We’re helping clients around the country. We get calls all the time Hey, I set up my LLC and that was the last thing they were supposed to do LLC’s are good, but they can be misused or screwed up really quickly now I’m not saying you got to hire a lawyer every time you want to set up an LLC But this right here YouTube Facebook live. I’m gonna break it down. I want to field your questions. You’re gonna love this There’s three main areas. We use LLC’s and where we don’t I’m gonna throw that out as well Now also I’m gonna give away right here some books I’m gonna give away a book today for everybody that shares This broadcast on their social media and we’re gonna raffle them off right here live. I’m gonna announce the winner today So this is the tax illegal playbook game-changing solutions for your small business questions, and I have a whole chapter on LLC podcast webinars it’s a workbook where you actually build your business plan or a Marketing plan and scrap plan for your current business now last week. It was windy Bullock that won the book and Tax and Liotta that Gilbert oppa dua that won this book and Wendy bought it steps So that was last week’s winners and I’m gonna announce today’s winners as we give it away and I want to give a big shout Out to entrepreneur magazine. I’m on live on Facebook entrepreneur my own Facebook. I’m on YouTube live on my own channel Thanks for watching. We’re down your questions below. I’m all yours This is free info strategy support and help on you as a small business owner how to use an LLC I’m a CPA an attorney and I love this topic. I love entrepreneurship. So let’s get into it now here We are on the whiteboard, and I’ve got my Diet Mountain Dew mmm It’s a good year. I think it’s this year. They people need to drink it too fast. All right now do an LLC Now I’m gonna get out here then we’re gonna tear who paper is to your questions type them down below Ever a client calls me from around the country or wears an hour CPAs in our office they call up and they go Hey, I need an entity and I go really let’s talk about your business well, I thought I had to have an LLC to have a business no and C is a shell was around your business So my first question is what kind of business are you running running operations. Are you selling a product online? Are you doing a service? Are you mowing lawns? Are you selling on eBay Craigslist? Are you an internet marketer or MLM? What if it is operational you’re getting a 99? I mean a product or service we’re gonna be over here This is operation If you’re holding assets now, I know some of you have watched my facebook lives before my good life Be patient is you’ve heard me do this before but if you’re doing operations, you’re on this side if you’re holding assets You’re over on this side. So think rental property holding cryptocurrency investments raw land a farm second home VRBO air B&B Assets here. We’re going to have operations over here So what I want to do is talk about the first place use LLC’s the first place we use is when a client graduates from a sole proprietorship into an LLC Now that’s option one and when they go to this LLC can for asset protection They want to stay hit I’m selling tacos in a food truck. I’m running a lawnmower with our mines landscaping business. I’m an electrician I’m a plumber I’m selling online, and I’m worried about getting sued and if you worried about getting sued you might have a sole proprietorship Transitioning to an LLC to get protection now. Here’s an important point. This is so important LLC’s do not save taxes. They don’t now let that sink in LLC’s limited liability companies do not save taxes. Here’s why know this is where this LLC starts to get tricky Because some people set up an and then they get screwed in taxes and they go what happened. Here’s what happened Let’s say you bring in a hundred grand in your business. You spend 25 on expenses and you net 75 You’re gonna pay its employment tax Right out of the gate. That’s 10 grand. No, I know watch my videos before I go So hang tight if I’m gonna pay 10 grand in taxes Then I’m gonna pay steady-state and then I’m gonna pay federal. I’m gonna get dinged three times All right, that’s cool. We all that when you set up an LLC the same thing happens You’re gonna pay the fifteen percent You’re gonna pay the ten gare until ten grand the state and the federal the LLC does not save taxes it protected you I’m gonna get into a personal Judgment, as long as you weren’t negligent or fraudulent or crazy. So you’re protected. That’s what the LLC gave you, but it saved you No taxes. Now. This is still on option 1 for LLC’s. So what we do Why love this LLC is you went from sole proprietor to LLC? But now I can convert you to an S corp for 120 bucks. That’s what we charge at our law firm Very easy, so you take the LLC and I convert it to an S corp It’s informed and during the year I can do it. I can retroactively Liebeck date an LLC Anytime during the year. So if you set up an LLC now in April and then down in November you’re making a ton of money I can back your LLC. Japan S corp and you say well mark. Why do I want to be an S corp? Here’s why? When you make that same 75 grand I can split the income just using a basic example I might take 25 grand as a w-2 and 50 grand is a k1 or pass-through now I get the 20% Pass-through deduction. I Take a w-2 for 25 grand. So my FICA No, FICA, no FICA on the 50,000. That’s the self-employment tax. No F word I don’t want the FICA. So 15 percent on this I just saved $7,500 That’s why you do an escort. You’re gonna spend 10 grand on an LLC You’re gonna spend 2,500 on an escort You’re gonna save that much in tax people. That’s why we do this Well, you say well mark now this is the this is the deep trick. Some people say well mark Why don’t I just set up an escort right out of the back? I don’t know how much money you’re gonna make so I don’t know if I want to set up an S corp and Then you don’t make the money but you got to file an S corp return and some of those things and so what I do Is the LLC now? so I have the flexibility to Backdate it into an S corp later. So that’s where I want to be and that’s my first choice for an LLC now Let me get the second and third choice out there and then I’m gonna fill some questions here So the firt next place I use LLC’s Just to hold rental property. Boom. I get asset protection There’s no self-employment tax on it at all rental property anyway, so who cares? I could put in the RB. Oh, I can put in an Airbnb. I can do that a Rental a duplex apartment building storage units of mute mobile homes. I can put all those in different We could talk about that too, but I ll Speas for asset protection not tax scenes Here, I’m doing an LLC so I can backdate it into tax savings see the difference There are two different LLC’s and you say well mark Why don’t I have one LLC in the middle and I put my rentals over here and I run my online business here. Ooh I do not want you to co-mingle liability and commingle two different types of income. I want you to split it up you don’t put the LLC’s and All that operation in the same LLC now, I’m gonna hold off on the third one. I’m gonna well, let’s take some questions here Let’s see where we’re going and I’m gonna again don’t forget if you’re just joining me I’m gonna raffle off both of these books and give them away and sign them and ship them free to you. Yeah here The end of the broadcast so I’m here for you. So type in your questions below now. We’re gonna try out our microphone here We’re gonna see if you can hear Malorie. If not, I’m gonna repeat the question. What do we got? How do you get a board of advisers do they need do you need to know them as your advisors and do they get paid? Okay. So Norman asks, I Needed a board of advisors with an LLC Technically you don’t have to have them but I highly recommend it is gonna give you better asset protection Better decision making and it’s gonna help you Grow your business. So here’s what you do you set up. Let’s get a new piece of paper here So when you set up your new LLC You’re gonna set up your LLC now, it could be for operations or it could be for a rental property, right? So you’ve got two different LLC’s? you can have a Board of Advisors so you set up this board of two three people. I have three people on mine and Over here. I’ve got people over Aim Board of Advisors for both or you can have two different ones But you’d have minutes meeting in your book of your LLC. And you say I hereby call my Board of Advisors to You share your plans you talk about your business and you get their advice and help That’s what a Board of Advisors does do and you don’t have to close it publicly and it’s simple and easy to do I’m gonna share on a personal note. I kind of had a feeling this last week That’s actually been for about two weeks that I need to ask this guy in my town to be on my Board of Advisors And I was like, I don’t want to buddy this guy He’s like, he’s like 65 years old used to be an attorney is very successful he’s got a plane above you’ve got all these cool things and but he’s I really like his style and he’s a Smart guy and I kind of know him He knows who I am and I felt I should ask him to be on my board I was like nah, I put it off for a week and I kept getting this feeling you got to go talk to him So Saturday justice last I’m doing this guy’s I’m just like you. I’m an entrepreneur trying to make it happen So this last Saturday, I called him up during the day and I said hey, can we meet for 10 minutes? He’s like I’m busy today, but I’ll catch you Monday. I’m like, all right, so this Monday just three days ago This is just three days ago. I met him out and I met him in his place and I I asked him Hey, I need a board. I’m one. I’m trying to be smarter in my business Would you be on my board of advisors here at LLC? You want to put together your board when we set up an LLC for clients around the country? We included we have our DIY cheap down-and-dirty $400 LLC in any state We do it for 800 bucks and you talk to a real tax attorney. Dr Devin or Christy or jerem orally or Kevin and one of these attorneys is gonna get on the phone and make a plan for the year. It’s affordable It’s simple and once a year you circle back and see how it’s going Anyway, it’s not the end of the world. It’s cheap simple and affordable. Okay, do we got here Carly? Okay, Pablo asks, should I create a rental an LLC for rental real estate? Pablo says an LLC for rentals Pablo I love it and some people say well when should I do it when I have three rentals or five? Pablo you buy one rental you want protection. You don’t want someone garnishing your wages Suing you some kids licking the wall because there’s mold on the wall. There’s asbestos flying off the ceiling the the The rain gutters are gonna fall down and decapitate someone I don’t know once you buy a rental you put it in your LLC. Now I know some of you are going Well, I closed in the loan in my name If I transfer the title The bank is gonna call the mortgage due and it’s there that’s gonna be no no in 20 years of transferring Thousands of rental properties around the country Malory right here that’s taken some questions. She’s helping out in the studio today She is a paralegal that helps people transfer their rentals into their LLC in any county in the country Thirty five hundred different counties around the country. She can help you out and You can call right now mallory at KQ s lawyers calm. Sorry Mallory. I’m selling you out here Okay, so she’s doing deeds for this do we get to do on sale call it a clause called by banks? No, once you close on your rental, deed it into your LLC make sure the LLC is on the lease agreement the LLC is on title the LLC pays the mortgage and There’s not gonna be any problem with the bank don’t go in and ask permission and freak out the banker remember they’re from Mars We’re from Venus. They have no idea what the hell you’re doing just transfer title and it’s gonna be fine Worst case scenario the transfer back. It’s not the end of the world I’ve talked to so many banking attorneys that are like we don’t care We believe it already sold your mortgage five times out on the Wall Street market So pay your mortgage transfer to your LLC and get protection Pablo as soon as possible. All right next question Josh what’s your opinion on Wyoming LLC as a parent LLC. Should I get a registered agent? Okay, Wow, Josh anything else world? Peace? Now if some of you heard that Josh said, what should I do about a Wyoming LLC, is that a good idea? Now this is deep. You ready guys? I’m going to another level. This is probably number four. I Said there was three reasons for LLC’s. I’m gonna throw out at number four. I haven’t even got to number three So we’re gonna hop skip to number four So let’s say you have an LLC for your operations blah blah blah. We already talked about that You’re gonna convert it to an S Corp when the time is right done and Pablo’s over here and Pablo’s like hey I got my LLC and I got a rental property Well josh says well mark. I got ten rental properties. They’re worth $1,000,000 I got these ten rental properties and I got like three LLC’s And he’s like man, I don’t want to get sued if I’ve got all these rental properties Now this is I don’t set up a Wyoming LLC for my brand-new clients Josh. This is where I use them so for some of you that have a lot of assets I once had an NHL hockey player that had just retired and he was Chasing fast women driving fast cars and we had to protect his million dollars. That’s where we use a Wyoming LLC So Josh, we want to protect those rentals from you texting and driving That’s where why only no LCS come in see normally Pablo We set up an LLC to protect Pablo from his rental Now what Josh is really asking is I want to protect the rentals from me being an idiot That’s where the COPE or charging protection entity comes into play There’s about 15 States and I’ve got a table here in the back of my book There’s a table in the back as to which LLC’s work and how they work in which state? Wyoming is one of our top three states We love them Utah’s good, Wyoming and Nevada Not bad cheaper and easier and Wyoming people keep even throughout registered agent. We’ll get there in a minute But what we do and I have a chapter in on advanced asset protection We put the Wyoming LLC right here. This is where the Wyoming LLC comes into play It owns your other LLC’s so Pablo when you get 5 or 10 rentals You’re gonna set up a wyoming LLC like Josh and we’re gonna have an own all your other LLC’s now I’ve doubled down on Protection. I’ve got asset protection three ways till Sunday That’s why we do it, but I don’t do it for my brand new investors No, how much do I charge thousands of dollars like some cheapskate attorney in Nevada? Hell no, we charge the same price that we’re gonna charge Pablo to set up his LLC I’ll set up a Wyoming LLC for 800 bucks you can talk to Christie Parker tour office and she’s gonna Talk to you about why we’re doing this and why you’re gonna have an LLC and explain to you how you’re gonna maintain it You get an hour with a real tax lawyer you get your LLC set up and you’re off to the races. Boom So that’s why we use Wyoming and LLC’s is for better advance protection now one last thing and I’ve got Debbie Debbie I’m coming to your question here in two seconds. Josh said should I have a registered agent? I just got chills because I love this topic so much. I’m a geek. I’m such a fricking geek We do not now have to move to the topic of privacy. And that’s really what josh is talking about think of a bulletproof vest and Camouflage they provide two different purposes. Right? Well, that’s where privacy comes in so Josh when I set up your Wyoming LLC I’d probably go do mail forwarding registered agent. Your name’s not gonna show up anywhere. Not even your address So now what I’ve done Pablo is I’ve taken Josh’s LLC to another level Not only are we getting double asset protection. You can’t even find him. I have a whole chapter in my book on privacy planning I just interviewed on my podcast Jay Jay Luna last month If you want a podcast that rocks get over to refresh your wealth just get on Tumut Stitcher if you’re an Android user or iTunes if you’re Apple, I’ve got a podcast every week I interviewed the father of privacy protection in America. His name is Jay Jay, Luna He’s on his third edition of the book how to disappear Josh you would frickin love it. So anyway, how much do we charge? 125 bucks to be a registered agent in any state we have mail for e for $200 a virtual mail box where we and all your mail. You can look at your mail online Done. We do it up to three companies $200 total for three companies male 4 we will hide your butt Josh so you’re not in trouble All right. What do we got? Deddi? Whoo? What do you do if you want to be taxed as an S corp, but have been paying the member guaranteed payments Wow, okay, Debbie ass we’ll use this diagram. So Debbie’s got maybe her rentals over here This is Josh and Pablo. They’re over here. Debbie’s over here going. I got an LLC. I’d love to ask Debbie What kind of business she is so she’s a woman so I’m gonna be a total male chauvinist and tell Su, m– that she might have a bakery. Is that really bad? I mean she could be an electrician but I don’t know I’m gonna say bakery because two doors down from right here There is the cutest little bakery shop with sugar cookies and I’m taking the whole team over there for a sugar cookie after this shoot and It’s the cutest little business So anyway, let’s assume debbie has a bakery and Debbie is worried about people walking in and slipping on frosting and break-in their leg So she’s got an LLC. She’s got protection, but as Debbie really saving taxes No, she’s got protection for her little bakery, but she’s not saving any taxes. So what Debbie’s done and I’m sorry, Debbie. I had a phone call earlier this week just like this so I’m gonna be blunt Debbie’s got a bad CPA. I’m not kidding It is an IRS rule that if you take a guaranteed payment out of an LLC, it does not save you taxes You still pay self-employment tax on the entire income in an LLC when you’re the owner in fact It is IRS ruling that you cannot take a w-2 out of an LLC of which you own it doesn’t work It doesn’t work Debbie get a second opinion. Your accountant is being a dumb You know what? So here’s what Debbie may be doing. Let’s say Debbie is making a hundred grand She’s making a hundred grand with her little bakery Well, she doesn’t guarantee payment of 40 grand and she takes pass through a 60 and her accountant has told her Oh You don’t pay self-employment tax on this 60 grand because you did a guaranteed payment Wrong Debbie if you get audited, I would sue your accountant. I’ve done it before I’ve gone after other accountants for jacking this up So what you do and if you accountants are watching this do your research I’m not kidding. I’ll back this up in my books I I teach C II courses on this What you have to do is simply convert this to an S corp and issue yourself a w-2 you’re done That’s the get out of jail free card you’re done. So it’s not the end of the world Debbie you char you file one form is called a 25:53, we charge 120 hundred twenty-five bucks to do it for you So you do it right and we back date your LLC into an escort for 2019 done so get a new accountant started W to do it right make the S election and now You’d never pay FICA the F word. I have a 1099 Okay. Nicole says She’s got a job over here and She wants to start a bakery just like Debbie, but she’s like I got a day job I work for the government and I get a 1099 over here cuz I do catering let’s say she does catering and she gets a 1099 for some of these companies that use her for catering. I just had a client call me today Literally one of my consults was a client that is doing app food delivery services making 8 grand a month Just delivering food for a for a food app in the local area. Very popular. That’s a 1099 that’s gonna be Self-employment income and Nicole’s gonna get hurt over here The real answer is Nicole. How much money is your w-2? I mean, how much is your 1099? The real answer is I would get on the phone with you Kristy devin lee any of the attorneys in my office we get on the phone with you and say How much is your w-2 how much is your 1099 if you’ve got a bigger 1099 and a smaller w2? We’re gonna do an S corp right away. We’re gonna do an LLC taxed as an S corp knock out at two w-2s So you’re gonna get a w-2 from your small business and you’re gonna get a w-2 from the government You’re gonna get both now. You have a no coal situation. She’s got a pretty nice w-2 Let’s say 80 grand 60 grand or more. Enter. 1099 is 20 grand not gonna do it I’m not even gonna worry about an LLC. I’ll keep her as a sole proprietor Let’s say she’s just selling crap on eBay or Etsy. There’s no liability exposure, Nicole Don’t even set up an LLC guys. Here’s the biggest takeaway Nicole probably doesn’t even need an LLC But she’s gonna get on some online application and go and set up an LLC she doesn’t even need it or She’s gonna take this 1099 and get screwed in the shorts on self-employment tax Because she needs to have an LLC taxed as an S corp That’s why guys I just want to say if you don’t like my style, you don’t like my accounting firm or law firm That’s cool. Get someone don’t go online and do the DIY and screw this up Take a little time to get it and some advice from a professional that understands the legal in accounting and brings it together That’s why we’ve been growing so quickly around the country and why? Entrepreneur allows me to come on their show on their web channel on Facebook and talk about this because it’s legit Anyway, ok, few more questions. Alright, then we’re gonna go out for cookies and I gotta announce my winners, Rosalie So tell me who my winners are Austin, what do we got Carly? I am currently running an essay a Single-member LLC at what a RR should I elect S Corp don’t I have to pay myself salary? Ok, so Austin uses all these cool initials He says he’s got a single-member LLC on SM LLC and at what a RR do I convert to an S corp? Well in Austin, you’re pretty jazzy there. Ok. So here’s what he’s got. He’s got an LLC and It’s a single-member LLC, which means that he owns at a hundred percent. So Austin owes over here. This is a little Austin and I’ll be a male chauvinist again and say Austin is a plumber He’s a plumber and he said I got an LLC so you go remember? I’m just messing around guys. I’m keeping it real. Ok. So Austin is here as a single member LLC and He loves Debbie’s Baker. But anyway, so this is Austin single-member LLC in the ass When should I convert it to an escort? And then he said he threw it at the end Does that mean I have to take a salary? Yes, when you convert to an S Corp BAM, you’ve got to take the salary you got to do it But it’s okay cuz you’re gonna save thousands of dollars Let’s say let’s say he’s making 75 grand and he’s paying self-employment tax out the rear end Now he’s gonna take 25 grand and 50 grand. We just saved 15 percent. We just saved 7,500 bucks boom right there Let me see do a tax return take salary save 7,500. Boom. This is the way to go folks This is absolutely critical. Now. The question was when to convert If he’s not in, California because the S corp an LLC cost a little more in California, I’m gonna say if any of you watching are making 30 to $40,000 net So if your gross is 50 grand or 60 grand and you’re spending 10 to 20 on expenses in your netting 30 to 40 Make the S election now Nicole who’s got the day job at the government. I Want to see this a little higher maybe dependent on her w2 level. So there’s a sweet spot people. Okay. We got Dara All right, Dara Can you issue issue yourself? A 1099 miscellaneous instead of a w-2 in an S quote no, Dara says, can I just give myself a 1099 I’ll just 1099 myself and Forget the w-2 because there’s a pain in the butt. I don’t want to do my quarterly 940 ones guys We charge 150 bucks a quarter to do your w-2s in any state around the country Very affordable and is simple it’s not the end of the world. You don’t have to take a paycheck every two weeks Dora I know you want a little Dara you want to wait till the end of the year just to attend a million you can’t do It the IRS will audit you. Let me say this another way people. Okay, listen LLC, you could not take a guaranteed payment in an S corp. You can’t 1099 yourself See the different you’ve got to do it W2 if you’re an S corp and you’ve got to take it in the shorts if you’re an LLC Those are the rules so do it right and you can save thousands just play the game Don’t hate the player just hate the game. This is the rules people live with it. Ok, Jerry. What do you got? Jerry has asked a couple of times. He wants to meet him personally. He’s in New York City How could he do this? He needs help. Jerry says, I’m in New York City mark you’re out west I want to meet face to face now. Here’s a couple thoughts people first of all I’ve got five amazing attorneys that work for me And this is not an infomercial Ryan shade the CEO of entrepreneur said mark we want you on Facebook every week But don’t make it a cell of fun. I’m not I’m here to give away some info I’m here to answer your questions But if any of you want to work with me or any of my five attorneys tax attorneys Very affordable you get an hour with them when you set up your entity in any state Jerry we use webcams They’re pretty cool. You can still see me face to face Okay So give me a call any of my attorneys of a webcam with you phone FedEx fax email all that good stuff And I will say this I am giving a workshop in Philadelphia in September. It’s 200 bucks. I include lunch I’m gonna do Philly cheesesteak for lunch because I’m in freakin, Philadelphia So I do it Philadelphia workshop this fall for $200 you get a whole day with me and Jerry Maybe we can go out to dinner for drinks. Give me a you know, just get signed up also everybody I’m gonna tell you I’m gonna be in Seattle in Philadelphia Honolulu, I know I got to go to Honolulu it’s a tough job and Orange County and Chicago I’m doing five locations this fall 200 bucks rate and Portillo’s in Chicago Philly cheesesteaks in Philadelphia We’re doing Mexican food in Orange County and I’m doing a luau in Hawaii. So you got to come to one of those location I don’t know where we’re gonna eat in Seattle yet something good. Maybe salmon. I don’t know. Okay, what do we got, Cynthia? Should I do an S or LLC for a startup credit repair business? Okay, Cynthia says should I do an LLC or an S corp for a credit? a restoration Credit repair business. Okay now, let me ask all of you help me out here. This is Cynthia She walks into your office and says I’m doing credit repair Is that short-term or long-term? Is that ordinary or passive? Remember passive is over here Ordinary is over here. She’s doing credit repair. Does that sound like services? It does to me. So we’re gonna be on this side of the equation while Pablo has got a rental property He’s over here. Okay fair enough so we know we’re on this side Now if Cynthia is gonna make what was the breakeven Austin asked what’s the breakeven around thirty or forty grand? So I’m gonna tell Cynthia Cynthia. How’s it going? Are you making a lot of money? She goes, I’m just getting started this year I’m gonna kick some butt. All right, so she what is cynthia gonna need in the long run? What does she need people? She’s gonna pay self-employment tax. If she doesn’t get it, you’re right. She is going to need an s-corporation But here’s the problem. We don’t know if Cynthia is gonna make enough money by the end of the year to justify it So what do we do? What do we do? We set up an LLC now and Then Cynthia calls me in November goes mark mark. I did it. I made 40 grand. I’ll say Congratulations, Cynthia, and we backdate the LLC into an escort done But Cynthia if you don’t do the LLC now and you call me in November and go mark mark, I made 40 grand You’re Sol and I’m not talking statute of limitations. You’re screwed. I cannot make you into an S corp in November if you weren’t an LLC now See the LLC is like tax insurance. Oh I know how to call that self-employment tax insurance I love it set up the LLC now, see how you do during the year and Then back date it into an S corp. That was really cool. I got to write that down I’m gonna use that Cynthia in the future So to set up your LLC now Cynthia get out and kick some butt and Cynthia this year take baby steps Don’t kill yourself. The American Dream is out there for the taking but it’s a process It’s not a get-rich-quick scheme do it and hopefully you win this book today. All right and Rosalie, let’s start getting our winners I’m ready to go share This video and you’re in the drawing and Rosalie is gonna choose two people here in the next five minutes. Okay, Shae wrong Yes wants to know do you recommend an escort for a trucking business that’s grossing over half a million dollars. Oh my gosh. Hey, Ron Hey, Ron, says if we’re hopefully the audio is working. So you heard Malorie there. He’s got a trucking business He’s making a half a mil gross or net Gross, so he’s doing a trucking business and grossing 500 grand I would hope he’s making 25 percent profit on that right so that would mean he’s maybe make it around 125 grand a year net now. Think about it people same question. Let’s do a Denis Keith’s new piece of paper here I’m gonna kill another tree Shea Ron is a trucker. He is providing services It’s not a rental property. Obviously. We’re on the ops side. He is making over 40 grand We’re gonna assume he’s netting about 120 140 grand. So he needs to be let’s compare it Let’s do that. This would be my last sheet and then we’re gonna announce our winners. Let’s compare it Let’s say Shea Ron. This is Shea Ron. Oh, you’re gonna love this Let’s say Shea Ron. He’s a trucking business He’s gonna do an LLC or he’s gonna do an escort All right. Now this could be an LLC Taxed as an S Corp, but he’s an escort. So let’s say he brings in 600 grand. Let’s go to red I just got chills. Again. This is so fun. I’m a nerd six hundred grand and Let’s say he’s in the trucking business and he’s gonna net 20 percent that would be around 120 grand fair enough, so that means he’s got 480 grand and expenses Now chez, Ron may say oh I’m making more profit than that Oh congratulations Shay, Ron, chill out I’m just using an example here. All right, so you’ve got a hundred and twenty grand neck fair enough Everybody gets it right 600 grand gross 480 in expenses got to pay for that big diesel truck and he’s gonna net 120 All right, cool. He’s an LLC What’s his tax? I? Don’t I don’t even know if I want to calculate this this is gonna be ugly 15.3% on 120 grand so that’s 15,000 on the first hundred another 15.3 on 20 grand that’s gonna be another two and I have three that’s gonna be $18,000 in self-employment tax Are you kidding me? And then let’s say he lives in a state with five or ten percent state tax then federal boum boum Eighteen grand Shay, Ron. What the hell is your account doing really right now? We go to the escort Now, what do we do? Well hunt on 20 you can go to the Kolar payroll matrix I’ve got a matrix in my book called dee Kohler payroll matrix go on onto youtube type kohler payroll matrix You don’t freakin love it. I would probably do a Third Maybe 50 but I’ll do easy math. I’m gonna probably take 40 grand in Salary and I’m gonna take 80 grand in k1 Now here’s what’s cool He doesn’t have to get a paycheck every week And he still takes home 120 grand chez Ron you still take every quarter My my payroll team is gonna call you up and they’re gonna go shave Ron. How are you doing? You’re like I’m making 10 grand a month. How do you think I’m doing? I’m living the dream. I’m like sweet So what do we do? We take salary of 40 grand for the year. So that means every three months We’re gonna kick out a payroll report. He doesn’t get a paycheck. He just takes a payroll report 10 grand 10 grand 10 grand What does that equal 10 10 10 10 it equals 40 grand in the w2 and we sending this deposit every Quarter, he’s on the open road eating at Cracker Barrel. I’m just calling him up running in his freakin payroll 130 140 bucks a quarter. We’re running this payroll He’s on the open road under enjoying those chicken and biscuits and the oh my gosh They are so good at country, you know Cracker Barrel, so he’s doing that on the open road Hopefully working out because as a trucker you can get really fat quick anyway, so he’s out there saving. How much is he saving? 15% on 80 grand see over here. He’s gonna pay 15% on 120. He was only paying it on 80 So 15% times 80 grand 8,000 a half that is four. That’s twice. He just saved $12,000 Are you kidding me? How would you like an extra thousand dollars in your bank account every month cha-ching? That’s literally what we did. That’s literally what we did in summary people a Little advice goes a long way don’t think you can go on to a website and click click click and Set up the right entity just do a meeting with a tax attorney a tax accountant lawyer slash whatever That you trust once a year once a year. I If I met with chez Ron and we set this whole thing up with filing fees We might be out of grand a thousand bucks. Let me see now. This is hard math Ok hard math here. Help me out spend a thousand save 12 now. I know it’s hard it’s hard Spend a thousand save 12 I think Shay run. It’s a good deal Anyway, I’m being sarcastic. I’m being what my wife would call passive-aggressive. Sorry Shane run. I’m just joking anymore. Marriage therapy, okay Here’s the deal people live the dream don’t give up get some frickin advice once a year from a tax strategist that Understands what the hell you’re doing and Jerry I don’t care if they’re and blurt Brooklyn down the street love that pizza. Just get on the phone. Give me a call We’ll get on a webcam touch and feel each other and come to Philly for cheesecake who are winners Mallory Ramon Wilson Ramon Wilson wins. What’s he win? Which book you call it Mallory? It’s you Okay, Ramon Wilson or Ramon. I have an uncle Ramon. Ramon. Wilson wins eight steps I’m gonna sign it and send out to you with tomorrow and angel. Morra wins the tax and legal playbook Even though they did not throw out a question. Maybe they did They just didn’t get selected but they are our winners of the books people. I’ll be here next Thursday I’ll be here helping you save taxes protect your assets and Helping you better live the American dream. That’s So that’s it. That’s a drop right there. That’s a pen drop. I’ll see you next week. Later

15 thoughts on “What to Know About LLCs with Mark J Kohler CPA, Attorney | 2019

  1. Excellent

  2. ๐Ÿ™ I never win any books

  3. Haha pen drop. ๐Ÿ˜Ž

  4. Good information mark

  5. LOVE IT!

  6. on the last example he saves 6k not 12k

  7. Great comprehensive video Mark! You've always pushed having a board of advisors, and I really love the idea but the question is do you pay them? If not, then what's the incentive from their point of view?

  8. I need your free book

  9. Hi Mark! My question is does it help to set up an LLC or S corp if you're a stock daytrader who makes 500k or more?

  10. Thanks for being such a "frickin nerd" about LLCs. I learn so much from your videos. ๐Ÿ˜Š

  11. are you forgetting to compute the taxes to pay on w2 on your example?

  12. Yeah, itโ€™s chauvinistic to assume that Debbie has a โ€œlittle bakeryโ€ … why not a law firm? Doctor office?

  13. Great video Mark! ๐Ÿ‘๐Ÿผ๐Ÿ‘๐Ÿผ

  14. Hello Mark … i will send more business towards you…2 they allredy part of it.. 2 more come ..one is a lender. Hopefully u can help him.

  15. Thank you so much for sharing your knowledge. I wish I had this information 15 years ago. I am now getting prepared for my next business when it happens, thanks to you.

Leave a Reply

Your email address will not be published. Required fields are marked *