Kentucky photo fun booth logo how to#
Our How to Start an S Corp guide will lead you through the process.
You can start an S corp when you form your LLC. We estimate that if a photo booth business owner can pay themselves a reasonable salary and at least $10,000 in distributions each year, they could benefit from S corp status. To offset these costs, you'd need to be saving about $2,000 a year on taxes. In addition, the business might need to spend more on accounting, bookkeeping, and payroll services. The S corp status requires that the business pay the employee-owner(s) a reasonable salary for the work they perform. S corp tax status can reduce self-employment taxes and will allow business owners to contribute pre-tax dollars to 401k or health insurance premiums. S corp status allows business owners to be treated as employees of the business (for tax purposes). Sole proprietorships and partnerships are taxed in a similar way to LLCs, but they do not offer limited liability protection or other tax options.Īn S corporation (S corp) is an IRS tax status that an LLC can elect.
The business’s net income is then subject to income taxes (based on the owner's tax bracket) and self-employment taxes. This means that the business's net income passes through to the owner's individual tax return. LLCs, by default, are taxed as a pass-through entity, just like a sole proprietorship or partnership. LLC Tax Benefits and Options for a Photo Booth Business To maintain your LLC's limited liability protection, you must maintain your LLC's corporate veil. The guest sues your business for the resulting damages.Īn LLC will also protect your personal assets in the event of commercial bankruptcy or loan default. Photo booth businesses will benefit from liability protection because of the risk of injury to guests while using and operating the photo booth, along with other general business risks like trademark infringement.Įxample: One of your employees fails to set up a photo booth backdrop correctly, causing it to fall on a party guest. This means your personal assets (e.g., car, house, bank account) are protected in the event your business is sued or if it defaults on a debt. LLCs provide limited liability protection. Protect your savings, car, and house with limited liability protection.By starting an LLC for your photo booth business, you can:
0 kommentar(er)
