Feb. 11, 2025

Forming a Partnership, Limited Liability Company

Forming a Partnership, Limited Liability Company

Creating a partnership, Multi Member LLC or LLP steps to consider. Choosing the right partner & the right entity. Type of partnerships. Entity choice & taxes. Pass-through taxation. Registering your partnership. Get your Employer...

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Season 2

Creating a partnership, Multi Member LLC or LLP steps to consider. Choosing the right partner & the right entity. Type of partnerships. Entity choice & taxes. Pass-through taxation. Registering your partnership. Get your Employer Identification Number, EIN, Taxpayer number. Determine your tax obligations, forms & Filing dates. Partnership agreements. Business bank accounts, business and personal expenses separate. Bookkeeping & managing business. Owner Operator starting a business.

Tax Talk 4 U is broadcast live Mondays at 10AM ET and Music on W4CY Radio (www.w4cy.com) part of Talk 4 Radio (www.talk4radio.com) on the Talk 4 Media Network (www.talk4media.com). Tax Talk 4 U is viewed on Talk 4 TV (www.talk4tv.com).

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WEBVTT

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The topics and opinions express in the following show are

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solely those of the hosts and their guests and not

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those of W FOURCY Radio. It's employees are affiliates. We

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make no recommendations or endorsements for radio show programs, services,

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or products mentioned on air or on our web. No

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liability explicitor implies shall be extended to W four CY

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Radio or it's employees are affiliates. Any questions or comments

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should be directed to those show hosts. Thank you for

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choosing W FOURCY Radio.

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Barry G.

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Fouler EA brings you tax Talk for You right here

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on W four CY Radio.

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And Talkboard TV.

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As an enrolled agent and a national leader in tax

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resolution as well as Trucker bookkeeping and tax planning.

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With over thirty years of experience.

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Barry will break down taxes, bookkeeping, tax planning, and tax

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relief for individuals and businesses just like you. So let's

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have some tax Talk for you with your hosts.

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Barry G. Foul Well, Good morning, USA. It's a great

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day here at Tax Talk for You again. Go to

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Tax Talk for You and subscribe so you make sure

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you stay up to date. If you miss an episode

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or a show. You can go back and see our

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podcasts there. iHeart radio and Spotify and amuch of many

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other places that our podcasts are hosted at. You know,

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I hate love to say this. This is a great

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day in America. Have been great, you know, three weeks

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that we've had President Trump in office, and whether you

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like him or not, what he's doing for America saving

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through his new agency DOGE that saving America's billions of dollars.

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They have uncovered a lot of wasteless spending which we

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all knew was there because we're overtaxed, and it's time

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to end over taxation and get us to a balanced budget,

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get us to you know, doing what the federal government

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is supposed to do, and not trying to manipulate what

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people in America are thinking or bribing them to vote

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one way or the other. Let's just get back to

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the necessities in life and let the states handle the

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issues within each individual state. That is what America was

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created and founded on, was states' rights, not all the

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rights being at the federal government level. That's my soapbox

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for today. But you know, hey, we're here to talk

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about partnerships. You know, ready said go let's learn how

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to form a partnership. You know, we got about ten

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steps in forming a partnership. So you decided, hey, you

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want to go into business, and maybe you're not going

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to go into business for yourself. Maybe you're going to

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go into the business with somebody else, even a wife,

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maybe a brother or brother in law, sister or sister

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in law, whatever it may be that you're going into

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business with. You've got to decide how are we going

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to set up this business? You know, so you know,

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if you're not going to run this solo, you start

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this partnership. You can form a partnership. Now, partnerships come

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in many different ways. You can have a general partnership,

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which is just a partnership that you go down to

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your local assumed name office and you say, hey, me

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and this other person is going to do this partnership,

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and then you have a general partnership. You can set

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up a partnership being a limited partnership, so you would

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have a limited liability partnership in LP. And you can

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also to have a partnership as a limited liability company.

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So there's many different structures that you can have when

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you're going into business and trying to be wanting to

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be a partnership. So you've got to start thinking which

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is the best for me? Where do I want to

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be as a partnership. And sometimes before you go into business,

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it is good to consult two people. One your tax guy,

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your tax coach, your guru that knows all about taxes

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and how having a partnership is going to affect your

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personal taxes for you and your other partner or partners.

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This partnership can have multiple partners more than one other person,

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so you might need to know how is this going

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to impact my personal taxes or the other partner's personal taxes.

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The other one is to contact your attorney attorney because

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partnerships sometimes come with some liability protections. So and sometimes

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those liability protections are going to fall into the LLC

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category or the LLP category. But make sure you're discussing

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that with your attorney because your attorney will be able

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to tell you do you need liability protection in what's

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going to give you that protection for you and your family?

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General partnership from everything I understand, is that going to

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give you any of liability protections for you, your family

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or your partners So again you might want to make

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sure that what you are doing, you are going to

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do it correctly and choosing the right structure for your

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business and your partnership. Now, the good news is partnerships

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are not taxed themselves, so you're not going to face

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double taxation unless you make an election to be taxed

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as a corporation. Then your partnership could have would have

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a tax and then when they pass the money through

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to you, you will be taxed again as a dividend

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or as payroll. So your general partnership, your limited liability partnership,

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and your LLC which would be multi member and be

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taxed as a partnership all pass net income to each

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of the partners based on either they're a pro rata

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share of capital. Your partnership agreement can give a different

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split between partners is different than the ownership percentages, but

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it will be passed through. So therefore you won't have

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double taxation where the company is getting taxed and then

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you're getting taxed. So you want to make sure that

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you're setting this up correctly and then look at what

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is the tax implications for this. So now you decided, hey,

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I am forming this partnership and you know, we've got

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six steps to be successful at getting this partnership formed

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and formed correctly. We see many many mistakes of business

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owners who think they formed their business correctly and they've

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done it incorrectly. They've done taken the incorrect steps, and

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then the cost to get it fixed sometimes is more

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expensive than just getting it and doing it right the

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first time. So first step, choose your partners. Choose them wisely.

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So you're going through all this work to set this

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business up and you're going to be working closely with

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your partners, So make sure you take your time when

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you're choosing your partner or partners in the business. You

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know things you're going to make sure that they're bringing

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to the table. What skills, what are their strengths actually,

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what are their weaknesses as well? What is their knowledge?

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What is their credibility? So maybe you're not going to

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work with the family member, you're going with a friend,

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You're going with somebody outside, somebody you're bringing in because

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they've got the knowledge to do something that you don't

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have and you need to bring them in. Or maybe

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they've got the credibility in that industry that helps add

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a level of strength to your business. You're also going

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to want to make sure that your partner is financially stable.

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You know, you want somebody that has some strength and

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financially that you know that it is not going to

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be hurting or bleeding the business absolutely dry of funds.

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You want them to have the same vision as you

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do for where this business will be going. And you know,

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maybe they bring in additional contacts and other resources for

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the partnership. You know, I always tell people, hey, don't

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rush when you're selecting your partner and deciding to go

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into a partnership. Maybe when you're asking yourself what do

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they bring to the table when we get along, do

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we share the same values and taking a little bit

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longer time to think about those issues sometimes it's better

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and maybe you can decide that, hey, maybe I just

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want to be a single member LLC. I want control

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of this business and I can employ this other person

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and therefore, if it doesn't work out, we don't have

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to unwind a business. We just can fire him or

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her in let him go. Or maybe you're bringing somebody

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in doesn't share it completely all your values and you

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want to make sure you still control more than fifty

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percent of the business. You're the one making the decisions. Hey,

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remember this is a commitment. This is almost like a

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marriage when you're going into a partnership. When we come back,

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we're going to also talk a little bit more in

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depth about determining your type of partnership in this business.

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We'll be right back after this.

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We have only scratched the surface of today's show. Please

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stand by as Barry G. Fouler will be right back

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with tax talk for you. If you own the IRS

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or are going through an IRS audit, don't go at

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it alone. Called Taxation Solutions tax Relief at eight eight

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and levees. Whether you're an individual or business, you need

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a solution and a strong, aggressive tax resolution. Don't let

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Call eight eight eight nine three zero one zero one

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six or go to Taxationsolutions dot net now for a

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free no obligation consultation. Let's get back to tax stock

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for you with more tax stock once again. Here's your host,

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Barry G.

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Feller. Hey, welcome back Taxation Solutions, Tax relief, providing relief

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to individuals who owe the Irs money, and when you're

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in debt to the IRS, it puts so much stress

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on your family. With Taxation Solutions right now, if you

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give them a call and set up a tax analysis.

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So if you owe money to the Irs, you need

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somebody to investigate what they can do, how they can

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do it, and where the money is going to save you.

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So call Taxation Solutions mention tax free and that's going

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to get you your twenty twenty four tax return prepared

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forty with tax analysis done for you for your tax debt.

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So if you're owing the IRS money, make sure you

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give Taxation Solutions a call and let them stop. Let

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us stop the IRS from taking everything you own. And

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that number is eight eight eight nine three zero one

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zero one six go to tax Station Solutions died at Hey.

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We're talking about forming partnerships and the different kind of

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partnerships that are out there. We've touched about this a

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little bit, but the general partnerships, you know, generally it's

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a company owned but two or more people and you

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agree to run it as partners are co owners and

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usually the profits are split, you know, fifty to fifty,

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unless you guys make some other arrangements or maybe change

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the partnership agreement on what the ownership percentages are. Generally,

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this doesn't provide any liability protection. If the business dissolves,

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you're both responsible for the debts one hundred percent. So

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if your partner can't pay fifty percent of the debts,

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you're going to end up paying one hundred percent of

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the debts. So you want to make sure that. Again

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you're vetting who your partner is going to be in

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this business. But you know, hey, these are low costs,

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easy to establish, flexible, but again the downside is those

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personal assets are probably going to be at risk. You know,

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not to men and mention your partner, and you are

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liable for the other person's actions as well. You're limited partnerships.

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These are going to be more structured than general and

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usually have both a general and a limited partner, so

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you're gonna need when you start this business, you're gonna

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have to have one general partner and at least one

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limited partner, So you know, a limited partner is only

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serving as an investor in the business typically doesn't have

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any decision making. They get ownership but don't have as

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many risks or responsibilities as a general partner, and if

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you hired to involved in the business, you can lose

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your status as a limited partner out there. General partners

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usually operate the company and assume liabilities for the partnership.

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General partner, you have control and responsibility when it comes

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to this limited partnership. So the other one is a

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limited liability partnership. It's in this organization you the owners,

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aren't held personally responsible for the business debts or the

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other partners actions. With an MLLP, you typically can't lose

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your personal assets if someone takes legal action against your business,

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but you still can be held personally liable if you

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do something wrong. So we take this as an example.

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In the owner operator trucking business, you're operating the truck,

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you get in an accident, God forbid, knock on wood.

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If you're driving a truck, when you're involved in that accident,

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whether it's your fault or the other party's fault, you

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typically will end up getting sued. And you're not getting

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sued just in your business. But you're getting sued personally

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for your actions. Now when you're an employee, if you

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have employees of the business and the employee does something wrong,

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in unlimited liability partnership, your responsibility ends where the company

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00:16:24.679 --> 00:16:27.960
is and it doesn't go past that. So you're not

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responsibility responsible for other people's actions. You're only responsible for

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your actions. Or if you have a partner in this

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and they're driving the truck and they get into an accident,

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your responsibility ends at the limited liability partnership and it

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doesn't come to you. But again it's all your attorney.

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Make sure you've got everything set up right and you

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have the liability protections that you need out there to

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save you in case something does happen. LLC as a partnership,

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you can have two or more owners. These owners are

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considered to be members. In a multi member LLC or

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LLC partnership, members personal assets are usually protected. In most cases,

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members can't be sued for the business actions or debts,

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but they can still be held liable for their own actions. Again,

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that same example, if you are a owner operator and

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you operate it out and I'll see you get in

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an accident, you're responsible for your actions, company and your

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other members of the LLC would not be held responsible

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for you unless you have talked to an attorney, you could

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they could find a way that you've been condoning bad

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actions of this other partner. So you know, hey, in

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this day and age is a latigious society. You never

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know where the lawsuits are going to come from, or

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what reason why, and where they're going to stay out. Now,

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we also talk about in all these businesses, when you

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start mix mixing business and personal in your business account,

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guess what they're going to pierce. What the attorneys tell

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me is what they call the corporate veil. And when

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they pierce that corporate veil, now your personal assets get

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involved as well. So you need to make sure that

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you're not commingling funds and actually running personal through the business.

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That's why we tell people, hey, make sure you do

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only business through your business accounts and personal through your

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personal accounts. It's first conversation we have with every one

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of our Truking bookkeeping clients as we start them on

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the road to great bookkeeper. Now, you know, choices, choices, choices.

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Everybody's got to make a choice. How do you want

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to be structured. What is right for for you? What

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is the best way of structuring this business? Sit down,

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talk to your tax guy, talk to your attorney, Talk

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with your partner or future partner. To make sure that

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what you guys are going to do, you're going to

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be able to dot your eyes across your t's so

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you know, make sure that you know where you're how

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you're setting up your business. You know, one of the

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most complicated things and setting up your own business and

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setting up a partnership or setting up an LC or

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setting up a corporation's coming up with a name for

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your business and for your partnership. You know, you sat

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down and talked about, you know, the type of partnership

284
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you've come up with, creativity and how you're gonna design

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this business and what you're going to do. But now

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you need that name. And name of a business is

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just as important because sometimes it identifies what you do.

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Trucker Tax Tools, for instance, we do taxes for truckers

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and thus the name Trucker Tax Tools. We're giving our truckers,

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our owner operators, the tools they need to run their

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business and lower their taxes. You know, we have a

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lot of fun in this business and I speak at

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Trusual Success, which is a seminar put on by O

294
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I D a Owner Operator Independent Drivers Association's Foundation every year,

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and when we talk to people moving out from W

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two drivers to owner operators and working for themselves. And

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you know, we've seen a lot of different creative names

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that are out there, and we have fun and we

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have fun working with truckers. So you know, there's a

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lot of things to be said when you sit down

301
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and start naming your business to identify you know, Hey,

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what do you do and how do you do it?

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We come back, We're I talk about registering your new partnership.

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We'll be right back after this.

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We have only scratched the surface of today's show. Please

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stand by as Barry gif Fowler will be right back

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00:21:15.400 --> 00:21:21.319
with tax talk for you. As an owner operator, you

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00:21:21.519 --> 00:21:25.039
already spend too much time away from your family. Trucker

309
00:21:25.119 --> 00:21:28.480
Tax Tools handles all your bookkeeping and taxes. No matter

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00:21:28.480 --> 00:21:31.200
what level trucker you are. Life on the road can

311
00:21:31.240 --> 00:21:34.799
be taxing, but that doesn't mean that your wallet or

312
00:21:34.920 --> 00:21:38.799
time with your family should suffer. Trucker Tax Tools makes

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00:21:38.880 --> 00:21:42.640
your life run smoothly. Go to Trucker Tax Tools dot

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00:21:42.680 --> 00:21:45.160
com for a free guide that will give you the

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00:21:45.319 --> 00:21:49.799
tools to never worry about your taxes again. Call Trucker

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00:21:49.880 --> 00:21:54.000
Tax Tools eight seven seven nine sixty six two four

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00:21:54.359 --> 00:21:58.079
seven seven or go to Trucker tax Tools dot com

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00:21:58.079 --> 00:22:04.279
now and let the experts keep you truck it. Let's

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00:22:04.319 --> 00:22:07.279
get back to tax Talk for you with more tax

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talk once again.

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Here's your host, Barry Gallo. Hey, welcome back Trucker tax

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Tools dot com working with truckers and helping owner operators

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and keeping them on the road. This weekend we were

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having a board meeting and talking about what can we

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do and what can we offer to truckers this year

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that is new and different from anything else we've ever done.

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And right now, if you go to Trucker Tax Tools

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or you call them at eight seven seven ninety nine

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six two four seven seven and talk to them about

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your taxes for twenty twenty four and your bookkeeping for

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twenty twenty five. What we're going to do for you

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if you're a new client, call in you know anytime

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you know this week and mention tax Talk for you special.

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We're going to give you six months of free bookkeeping

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00:23:09.200 --> 00:23:13.960
with your paid twenty twenty four tax return again six

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months free bookkeeping with your twenty twenty four personal tax return.

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So come to us, bring, let us do your personal

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twenty twenty four tax return, and we're going to give

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you that six months of free bookkeeping for twenty twenty five.

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I can't wait. I mean, it's it's a fantastic deal

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that they've come up with and the board has talked about.

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And you know, we're expanding, we're growing. We're here to

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help you as an owner operator stay on the road

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and know what your net income is from your business

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and how you can reduce your taxes and making sure

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you got every write off that you can possibly have

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as a trucker. Hey, we got a question in before

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we move on registering your partnership. Brandy asked if we

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can explain more what is the difference about what gets

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paid from where and what is that corporate veil we've

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00:24:11.720 --> 00:24:16.240
talked about. Randy, Thanks for the question. The big difference

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is you've got to look at what you're paying out

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of the business. If it's a business expense, ordinary and necessary,

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something that's deductible for the business, it is business irs terms,

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it ordinary and necessary. Your home mortgage is not a

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business deduction. Your home utility bill is not a business deduction.

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Maybe you've got a home office and you'll be able

358
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to take maybe home office expenses, but you can't write

359
00:24:45.519 --> 00:24:50.200
those things out of your business. Your lawn care, things

360
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that you have going on that is personal, your family food.

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If you're buying coffee and supplies for an office and

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you happen to be at the store, you can itemize

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it and do an expecial report to your business and

364
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have your business reimburse you. Or if you have a

365
00:25:06.079 --> 00:25:10.920
business credit card, you can do two orders while you're

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at the store. We do this quite frequently and put

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the business stuff on the business credit card and the

368
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personal stuff on your personal credit card. It's that simple,

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just breaking down what are the business expenses, what are

370
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the personal expenses, and making sure you're not doing that.

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Corporate veil is a term we've gotten from the attorneys

372
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out there. So you've set up this limited liability partnership

373
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and the liabilities aren't going to flow out of that

374
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limited liability partnership or LLC to you as a limited

375
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partner as a member of the LLC, of course, unless

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it's your own action and it stays within the business.

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Meaning let's say you've got a couple of people working

378
00:25:59.799 --> 00:26:02.359
for you, you and they do something wrong, the company

379
00:26:02.400 --> 00:26:07.599
gets sued and you lose. That liability stays right there

380
00:26:07.640 --> 00:26:11.039
within the company. They're not coming out after your personal assets,

381
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so it gives you that protection. Now you've com mingled

382
00:26:15.319 --> 00:26:20.640
business and personal and it's like running a sofialprodership. It's

383
00:26:20.720 --> 00:26:24.519
open season and there's no going to be no personal

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00:26:24.559 --> 00:26:27.880
asset protection based on the attorneys that I've talked to

385
00:26:29.200 --> 00:26:32.079
about this and losing that corporate veil. And that's the

386
00:26:32.119 --> 00:26:35.279
same thing if you're running a corporation as well as

387
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LLC or limited liability partnerships or even a limited partnership,

388
00:26:42.319 --> 00:26:45.519
so you know that protection doesn't stay there if you

389
00:26:45.680 --> 00:26:52.119
are commingling funds, so registering your partnership, you finally creatively

390
00:26:52.400 --> 00:26:55.599
game up with a great name. Well, first thing you

391
00:26:55.640 --> 00:26:57.680
want to do if you're trying to do this on

392
00:26:57.720 --> 00:27:00.400
your own is go to your Secretary of States office

393
00:27:00.440 --> 00:27:04.079
at C is that name taken? Because maybe you came

394
00:27:04.240 --> 00:27:07.599
up with that great name truck or tax tools, and

395
00:27:07.720 --> 00:27:11.079
you go and you find out it's already owned. Somebody

396
00:27:11.079 --> 00:27:14.559
already has that business. You will not be allowed to

397
00:27:14.720 --> 00:27:19.039
set up that business. You can also go and look

398
00:27:19.240 --> 00:27:22.720
has that name been trademarked or copyrighted, And if it has,

399
00:27:22.799 --> 00:27:24.200
then you're not gonna be able to set it up

400
00:27:24.240 --> 00:27:29.400
anywhere or get anything done. So if you're going to

401
00:27:29.440 --> 00:27:32.319
be doing business in more than one state, you've got

402
00:27:32.319 --> 00:27:36.839
to register with each state. If you have a domestic

403
00:27:36.880 --> 00:27:39.960
partnership in your main state, a foreign partnership then in

404
00:27:40.160 --> 00:27:43.359
all other states. But it's also going to depend where

405
00:27:43.359 --> 00:27:46.240
you have your nexus. So where do you have your locations.

406
00:27:46.279 --> 00:27:48.920
If you only have a location in one state, but

407
00:27:49.119 --> 00:27:52.640
you may do things nationwide, you don't necessarily have to

408
00:27:53.200 --> 00:27:57.480
register your company across every state. Again, talk to your

409
00:27:57.519 --> 00:28:02.680
attorney and consult with the Secretary of State's office as well.

410
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When you're going to register your business. Now we talked

411
00:28:07.559 --> 00:28:10.720
about this in the beginning. You're setting up a partnership,

412
00:28:10.759 --> 00:28:16.039
you've got to determine what are your tax obligations. So

413
00:28:16.799 --> 00:28:18.759
when you set up this business and you're going to

414
00:28:18.759 --> 00:28:21.839
set up a partnership, you're going to have an obligation

415
00:28:22.039 --> 00:28:25.559
to file a tax return or franchise tax return with

416
00:28:26.079 --> 00:28:29.440
your state. You're going to be filing a business tax

417
00:28:29.480 --> 00:28:33.599
return warm ten sixty five that's going to report your

418
00:28:33.640 --> 00:28:36.440
profit and loss from the business assets in the business,

419
00:28:37.680 --> 00:28:40.519
and then that's going to be due on the fifteenth

420
00:28:40.640 --> 00:28:44.319
day of the third month after of the end of

421
00:28:44.359 --> 00:28:47.759
your partnership tax year. Generally, partnership tax years are going

422
00:28:47.799 --> 00:28:53.039
to run calendar years because that's just generally where they're

423
00:28:53.039 --> 00:28:57.359
going to set up these partnerships for you. And then

424
00:28:57.519 --> 00:28:59.599
each partner is going to get a K one from

425
00:28:59.599 --> 00:29:03.319
the ten sixty five that gets filled out and filed

426
00:29:03.400 --> 00:29:08.119
with their personal tax return. You're supposed to get those

427
00:29:08.200 --> 00:29:13.119
k ones by March fifteenth each year, and then you,

428
00:29:13.519 --> 00:29:17.319
as the individual partner, would have to file that by

429
00:29:17.440 --> 00:29:21.079
April fifteenth. Now there are extensions out there that can

430
00:29:21.119 --> 00:29:24.440
give them six more months and get out to September,

431
00:29:24.480 --> 00:29:26.599
but it's also going to mean each partner is going

432
00:29:26.640 --> 00:29:30.279
to have to extend their tax returns as well until

433
00:29:30.440 --> 00:29:34.599
those k ones are issued, so each partner would have

434
00:29:34.680 --> 00:29:38.400
to extend their tax return on top of that. Now

435
00:29:38.519 --> 00:29:41.880
you've got your partnership, you set it up through your state.

436
00:29:42.440 --> 00:29:45.680
Now you need to get an employer Identification number that

437
00:29:46.079 --> 00:29:52.480
is provided by the federal government IRS. You will file

438
00:29:53.559 --> 00:29:59.960
for that federal tax ID number in EI N filing

439
00:30:00.119 --> 00:30:04.279
in SS four. Be very careful filing these things. If

440
00:30:04.319 --> 00:30:07.680
you're not going to have people on payroll, you're not

441
00:30:07.720 --> 00:30:12.000
going to have employees. Don't check off you're starting off

442
00:30:12.079 --> 00:30:16.079
the business with employees. The IRS is going to send

443
00:30:16.079 --> 00:30:20.680
you a letter telling you about your other tax obligations.

444
00:30:21.119 --> 00:30:24.839
Read it. Provide it to your tax preparer to make

445
00:30:24.920 --> 00:30:30.400
sure that your business is set up right within the

446
00:30:30.519 --> 00:30:34.240
taxing authority. So if you check off that you're going

447
00:30:34.279 --> 00:30:37.160
to have employees, the IRS is going to tell you

448
00:30:37.440 --> 00:30:40.720
and need to start filing. Nine forty ones and N

449
00:30:41.799 --> 00:30:45.119
nine forty one are for payroll taxes. Nine forty is

450
00:30:45.160 --> 00:30:49.440
federal unemployment tax. They're also going to be talking to

451
00:30:49.839 --> 00:30:54.079
your state and then your Workforce Commission or your unemployment

452
00:30:54.119 --> 00:30:56.480
office at your state level is going to require you

453
00:30:56.559 --> 00:31:01.799
to get a local tax number as well. So you

454
00:31:01.880 --> 00:31:05.640
need to get with the IRS, get that SS four filed,

455
00:31:06.559 --> 00:31:11.039
get it filed correctly, get yourself set up as a partnership.

456
00:31:11.400 --> 00:31:15.960
It'll tell you when your first partnerships return will be due.

457
00:31:16.480 --> 00:31:18.799
If you're setting it up now, your first partnership or

458
00:31:19.279 --> 00:31:21.359
return would be due for twenty twenty five and it

459
00:31:21.400 --> 00:31:25.799
would be due March fifteenth of twenty twenty six. So

460
00:31:26.000 --> 00:31:31.400
make sure you've got those items crossed off and checked

461
00:31:31.480 --> 00:31:36.079
as you're going through, and then make sure you're filing

462
00:31:36.200 --> 00:31:40.680
all the tax forms that are required your entity with

463
00:31:40.799 --> 00:31:44.400
the federal government and the state government, because the fines

464
00:31:44.400 --> 00:31:48.920
and penalties are terrible when you miss those deadlines or

465
00:31:48.960 --> 00:31:51.880
you just forget you've got to file these things, and

466
00:31:51.920 --> 00:31:55.880
we've seen many many people do that. What we call

467
00:31:56.160 --> 00:31:59.079
come back right after this is we're going to talk

468
00:31:59.079 --> 00:32:01.880
about partnership agreements. We'll be right back.

469
00:32:03.160 --> 00:32:06.799
We have only scratched the surface of today's show. Please

470
00:32:06.839 --> 00:32:10.119
stand by as Barry G. Fowler will be right back

471
00:32:10.200 --> 00:32:16.119
with tax talk for you. As an owner operator, you

472
00:32:16.240 --> 00:32:18.759
already spend too much time away from your family.

473
00:32:19.319 --> 00:32:21.359
Stop spending time doing pay forwork.

474
00:32:21.839 --> 00:32:25.359
Go to Trucker tax tools dot com a solution filled

475
00:32:25.400 --> 00:32:27.079
specifically for truckers.

476
00:32:27.359 --> 00:32:29.000
Trucker taxtools dot.

477
00:32:28.759 --> 00:32:34.839
Com makes your life run smoothly. Let's get back to

478
00:32:35.000 --> 00:32:38.680
tax stock for you with more tax stock once again,

479
00:32:39.160 --> 00:32:41.079
here's your host, Barry G.

480
00:32:41.359 --> 00:32:41.759
Fowler.

481
00:32:44.039 --> 00:32:49.480
Hey, welcome back. Talking about establishing partnership agreement. So maybe

482
00:32:49.519 --> 00:32:53.400
your husband and wife and you decide you don't need

483
00:32:53.440 --> 00:32:58.440
a partnership agreement for your LLC. It's it's not necessarily

484
00:32:58.480 --> 00:33:01.759
the end of the world, but again I always suggest

485
00:33:01.839 --> 00:33:05.599
you have it. If you're outside of family, definitely create

486
00:33:06.039 --> 00:33:14.799
the partnership agreement. You've got to narrow down each partner's roles, responsibilities, liabilities.

487
00:33:15.759 --> 00:33:19.160
To do that, your partners got to have that agreement.

488
00:33:19.880 --> 00:33:24.440
A partnership agreement becomes a legally binding contract that lays

489
00:33:24.480 --> 00:33:31.640
out each partner's role, liability, profit distribution, ownership level, and

490
00:33:31.720 --> 00:33:35.680
then you can refer back to that agreement during any

491
00:33:35.680 --> 00:33:39.359
time you have a conflict or to find resolutions to

492
00:33:39.400 --> 00:33:43.039
those conflicts. Part of that agreement. You also might want

493
00:33:43.079 --> 00:33:44.960
to put a buy sell agreement in there, so that

494
00:33:45.000 --> 00:33:48.000
if one partner decides they want to leave, there are

495
00:33:48.160 --> 00:33:53.359
terms there. Or one partner passes away, does the other

496
00:33:53.400 --> 00:33:57.559
partner really want to be in partnership with that person's

497
00:33:57.640 --> 00:34:02.079
next of ken? Probably not on so you might want

498
00:34:02.119 --> 00:34:04.880
to have a buy sell agreement in there too. And

499
00:34:05.119 --> 00:34:08.320
your agreement. You know, this varies from business business and

500
00:34:09.199 --> 00:34:11.639
it's going to really depend on the type of partnership

501
00:34:11.719 --> 00:34:16.360
you choose. And if you're creating this, make sure you're

502
00:34:16.360 --> 00:34:21.800
following your states particular partnership laws and rules as well.

503
00:34:22.239 --> 00:34:24.639
And that's why we say, hey, consult the attorneys and

504
00:34:24.679 --> 00:34:28.239
make sure they get everything right. You want to make

505
00:34:28.280 --> 00:34:31.679
sure that you've doubted all your eyes across all your t's.

506
00:34:32.159 --> 00:34:34.840
Now you're in business, you've got the partners agreement, you've

507
00:34:34.840 --> 00:34:39.480
got the employer identification number. How it's time go obtain

508
00:34:39.880 --> 00:34:44.360
any licenses or permits that you need. So sometimes before

509
00:34:44.400 --> 00:34:47.119
you begin begin operating, you've got to have a license

510
00:34:47.159 --> 00:34:50.559
and a permit, and it really depends on your state

511
00:34:50.639 --> 00:34:53.199
and local requirement. So not only are you going to

512
00:34:53.199 --> 00:34:54.800
be dealing with the state, but you also got to

513
00:34:54.880 --> 00:35:00.880
check locally what's required of you and what permits you know,

514
00:35:00.920 --> 00:35:04.559
whether it's a license of sales, tax permit, resale certificates,

515
00:35:05.840 --> 00:35:13.039
building permit, sign permit, any industry specific licenses. So make

516
00:35:13.079 --> 00:35:18.239
sure you're checking with your state and local taxing authorities

517
00:35:18.280 --> 00:35:21.920
and local authorities what is required. I mean, even if

518
00:35:21.960 --> 00:35:23.519
you're running a building and you're going to go put

519
00:35:23.519 --> 00:35:27.639
a sign up, many localities have sign permits that are

520
00:35:27.679 --> 00:35:30.239
required and if you don't put them up, get the

521
00:35:30.280 --> 00:35:34.559
permits as well as like occupancy permits, you could be

522
00:35:34.599 --> 00:35:38.079
fine red tag where you can't enter the premises, you

523
00:35:38.119 --> 00:35:41.280
can't be doing business there. But again check with your

524
00:35:41.320 --> 00:35:45.480
state and local authorities. But you've got your business now,

525
00:35:45.480 --> 00:35:47.840
you've got the employer identification number, you've got all your

526
00:35:47.840 --> 00:35:51.599
partnership agreement, you've got the certificate from the Secretary of State.

527
00:35:51.880 --> 00:35:55.159
It's time to go open that bank account. Open that

528
00:35:55.599 --> 00:36:01.400
business account with the business name, make that first deposit,

529
00:36:01.880 --> 00:36:06.000
put both yours and your partner's money in there for

530
00:36:06.280 --> 00:36:09.639
what was designated to be the capital for the business.

531
00:36:10.199 --> 00:36:14.960
And then make sure that anybody that is in the

532
00:36:14.960 --> 00:36:17.639
partnership that's in the partnership agreement, that has authority to

533
00:36:17.679 --> 00:36:21.760
sign on it, can sign on that account and get

534
00:36:21.760 --> 00:36:24.199
them signature cards at the bank or bank will help

535
00:36:24.239 --> 00:36:28.519
you with this. I believe many banking institutions can put

536
00:36:28.519 --> 00:36:33.480
a limit on your account where certain things require two signatures,

537
00:36:34.000 --> 00:36:38.280
so that you or your partner can't go and write

538
00:36:38.320 --> 00:36:41.599
a check for excess amount of money for something that

539
00:36:42.400 --> 00:36:47.679
hasn't been approved. That are out there. So set the

540
00:36:47.800 --> 00:36:51.280
limits within that partnership agreement, and then make sure those

541
00:36:51.360 --> 00:36:56.239
limits can be enforced within any banking institution that you're

542
00:36:56.280 --> 00:37:00.679
working with. Last option last thing you need to do

543
00:37:01.280 --> 00:37:06.000
is choose a bookkeeping accounting option for your business. You

544
00:37:06.039 --> 00:37:08.840
need to keep track of records. You need to make

545
00:37:08.920 --> 00:37:14.519
sure that you know what the financial performance is for

546
00:37:14.679 --> 00:37:17.360
your business. So you're runner operator out there, it's your

547
00:37:17.360 --> 00:37:20.719
first time. Are you making money? Where's the money going?

548
00:37:21.159 --> 00:37:23.360
Always seems like there's more money going out of a

549
00:37:23.400 --> 00:37:27.000
business than coming into a business, especially in a startup.

550
00:37:27.440 --> 00:37:30.480
So you know whether you're doing it yourself and you're

551
00:37:30.519 --> 00:37:35.960
manually recording transactions using accounting software like Zero or hiring

552
00:37:35.960 --> 00:37:41.079
a bookkeeper like Trucker Tax Tools. You need something that's

553
00:37:41.159 --> 00:37:44.679
going to keep you organized and keep you up to

554
00:37:44.760 --> 00:37:48.320
date knowing that, hey, we got things right. You know.

555
00:37:48.400 --> 00:37:52.599
Hiring bookkeeping services like Trucker Tax Tools for your trucking

556
00:37:52.679 --> 00:37:56.679
business gives you peace of mind knowing that your books

557
00:37:56.920 --> 00:37:59.400
are in good hands and are going to be accurate

558
00:37:59.400 --> 00:38:01.559
as long as you're providing all the information that is

559
00:38:01.559 --> 00:38:04.679
requested and need it and you know, yes, it's more

560
00:38:04.719 --> 00:38:08.719
expensive than to do it yourself plan out there, but

561
00:38:08.840 --> 00:38:12.960
do it yourself plan doesn't always ensure accuracy, doesn't ensure

562
00:38:12.960 --> 00:38:17.880
that you're getting every tax deduction possible for you and

563
00:38:17.960 --> 00:38:22.599
your business Hey again, while we're talking about bookkeeping and taxes. Uh,

564
00:38:22.679 --> 00:38:26.199
if you're an owner operator out there, truck driver, call

565
00:38:26.360 --> 00:38:30.239
us today eight seven seven nine sixty six two four

566
00:38:30.360 --> 00:38:33.519
seven seven eight seven seven nine sixty six two four

567
00:38:33.599 --> 00:38:36.519
seven seven go to truck or tax tools dot com.

568
00:38:36.559 --> 00:38:39.599
Set up that free consultation. You pay for your twenty

569
00:38:39.599 --> 00:38:41.400
to twenty four tax return, you're going to get six

570
00:38:41.480 --> 00:38:46.800
months of bookkeeping for free, basic bookkeeping for free. Hey,

571
00:38:46.800 --> 00:38:51.239
it's a fantastic deal for you. Makes your life run

572
00:38:51.360 --> 00:38:55.079
much smoother and then you get more time, you know,

573
00:38:55.199 --> 00:38:58.280
with your family. If you're a small business and you're

574
00:38:58.320 --> 00:39:01.679
running a partnership, I suggest you get a good bookkeeping service.

575
00:39:01.679 --> 00:39:06.679
It's out there, because this gives you somebody to bounce

576
00:39:06.760 --> 00:39:10.000
questions off of. Make sure you're getting all your tax deductions,

577
00:39:10.559 --> 00:39:13.039
make sure that you're getting all the write offs that

578
00:39:13.119 --> 00:39:16.960
you and your business deserve. And now that you're running

579
00:39:17.000 --> 00:39:20.760
a partnership, those working in the partnership also has to

580
00:39:20.840 --> 00:39:25.599
have a reasonable wage. Now we're not talking owners in

581
00:39:25.639 --> 00:39:30.400
a partnership having salary through W two wages. No, we're

582
00:39:30.440 --> 00:39:35.679
talking about what the IRS calls guaranteed payments. It is

583
00:39:35.800 --> 00:39:40.880
compensation for owners in a business that are working in

584
00:39:40.960 --> 00:39:44.559
the business to have a reasonable wage for everything that

585
00:39:44.599 --> 00:39:48.559
they are doing in the business. Now that means how

586
00:39:48.639 --> 00:39:51.480
you are the active owner in the business and you're

587
00:39:51.519 --> 00:39:53.960
doing a lot more than your partner. You're getting paid

588
00:39:54.000 --> 00:39:58.360
through these guaranteed payments. Plus you're getting distributions based on

589
00:39:58.599 --> 00:40:05.000
any distributions that you're taking based on the ownership profitability,

590
00:40:05.519 --> 00:40:11.440
and distributions based on your percentage of ownership. So you know,

591
00:40:11.480 --> 00:40:14.440
you got to sit down and look at that and decide, Hey,

592
00:40:14.519 --> 00:40:17.800
which is the best way of going. Hey, we got

593
00:40:17.800 --> 00:40:20.639
a question in from Alex what is better to start

594
00:40:20.719 --> 00:40:27.239
an LLC or an escort. Well, that's a really complicated question.

595
00:40:27.320 --> 00:40:29.159
I think we talked about escorps in one of our

596
00:40:29.159 --> 00:40:31.360
previous podcasts. I'm going to touch base on it just

597
00:40:31.480 --> 00:40:34.320
really here a little bit. But you go check out

598
00:40:34.320 --> 00:40:38.159
one of our podcasts and where we talked about escorps

599
00:40:38.239 --> 00:40:42.599
and why we would use an escort. But if you

600
00:40:42.639 --> 00:40:46.320
are a single member LLC, not a multi member where

601
00:40:46.320 --> 00:40:51.639
we're talking about a partnership, a single member, you your

602
00:40:51.679 --> 00:40:54.039
net income is going to be taxed for Social Security

603
00:40:54.039 --> 00:40:57.920
and Medicare fifteen point three percent. Both sides if you're

604
00:40:58.000 --> 00:41:01.559
making a lot of money, you know over one hundred thousand,

605
00:41:02.079 --> 00:41:05.960
escort might be the right option for you. But if

606
00:41:05.960 --> 00:41:11.960
you're a multi member LLC, it's giving you that same

607
00:41:12.840 --> 00:41:17.719
savings by using that guaranteed payments as an escort does

608
00:41:17.760 --> 00:41:20.599
through payroll, but you don't have to run payroll. So

609
00:41:20.599 --> 00:41:24.000
if you're a multi member LLC tax as a partnership

610
00:41:24.480 --> 00:41:26.679
maybe even husband wife, and choose to be taxed as

611
00:41:26.719 --> 00:41:30.239
a partnership, then you could have savings on that Social

612
00:41:30.239 --> 00:41:34.760
Security and Medicare by the limiting the guaranteed payments the

613
00:41:34.840 --> 00:41:38.480
reasonable wage paid to you as an owner. But again,

614
00:41:38.519 --> 00:41:42.000
if you are a single member LLC and maybe you're

615
00:41:42.039 --> 00:41:46.519
only making that income forty or fifty thousand, it's not

616
00:41:46.559 --> 00:41:50.360
necessarily worth going to an escort for because you do

617
00:41:50.480 --> 00:41:54.159
have to run payroll for yourself. Now, if you've got employees,

618
00:41:55.719 --> 00:41:59.519
you know adding one more employee doesn't hurt you, and

619
00:41:59.599 --> 00:42:02.519
putting yourself in there at a reasonable salary depending on

620
00:42:02.559 --> 00:42:06.039
what you're doing for the business, might be worthwhile. Hey,

621
00:42:06.039 --> 00:42:09.920
set up a time to talk to your tax preparer,

622
00:42:10.039 --> 00:42:14.639
talk to your tax guy and determine what is right

623
00:42:15.239 --> 00:42:17.639
for you. If they should be able to run through

624
00:42:17.679 --> 00:42:21.239
and do that. If not called taxation solutions, I know

625
00:42:21.360 --> 00:42:25.360
they can help put a solution together for you in

626
00:42:25.400 --> 00:42:27.559
regards to whether you should be an a single member

627
00:42:27.760 --> 00:42:31.199
LC or an s corp. There's a lot of analysis

628
00:42:31.239 --> 00:42:34.039
that goes into it. So you know, generally those are

629
00:42:34.079 --> 00:42:36.000
the guidelines we use, but we also sit down and

630
00:42:36.039 --> 00:42:39.800
talk about what's expected future for your business as well. Hey,

631
00:42:39.800 --> 00:42:44.039
now you're in business. Congratulations, you've got your business going.

632
00:42:44.079 --> 00:42:49.719
You've got it started out there. Market market, market, market yourself,

633
00:42:49.840 --> 00:42:53.840
market your business, do what you gotta do, get aim out,

634
00:42:53.920 --> 00:42:58.280
get to referral that. Sometimes marketing is the hardest thing

635
00:42:58.400 --> 00:43:04.679
that anybody does. It's selling yourself, selling your business, cold calling,

636
00:43:05.039 --> 00:43:09.679
getting those referrals from friends, family, Let everybody know. Shout

637
00:43:09.719 --> 00:43:13.519
it from the tallest mountain trucker. Tax tools is in

638
00:43:13.639 --> 00:43:15.719
business helping truckers nationwide.

639
00:43:16.119 --> 00:43:22.480
Taxation's tax relief, taxation taxation solutions. Tax relief is helping

640
00:43:22.840 --> 00:43:27.679
save millions of dollars in tax debt for our clients

641
00:43:27.719 --> 00:43:28.639
all across the country.

642
00:43:28.719 --> 00:43:33.400
See, it's announcing these things not just to you and

643
00:43:33.400 --> 00:43:36.239
your partner, but to everybody that's out there. Come up

644
00:43:36.239 --> 00:43:39.079
with your elevator pitch your thirty second pitch. My daughter

645
00:43:40.559 --> 00:43:44.400
who's at Texas Tech and getting ready to apply to

646
00:43:44.800 --> 00:43:48.079
veterinarian school, has to have her elevator pitch her thirty

647
00:43:48.079 --> 00:43:51.400
second pitch to help talk about why she wants to

648
00:43:51.440 --> 00:43:55.000
be there. That's what you need, that elevator pitch. Hey,

649
00:43:55.039 --> 00:43:58.159
our elevator pitch. We're here Tax Talk for You every Monday,

650
00:43:58.400 --> 00:44:02.599
ten am Eastern Time, talking about taxes, talking about bookkeeping,

651
00:44:02.960 --> 00:44:07.000
talking about what could save you money every day across

652
00:44:07.000 --> 00:44:10.039
the board. Hey, tune in to am Eastern time right

653
00:44:10.079 --> 00:44:11.960
here at Tax Talk for You. God bless you have

654
00:44:12.039 --> 00:44:13.119
a wonderful week.

655
00:44:14.239 --> 00:44:17.440
Are you an individual or business that wants to understand

656
00:44:17.480 --> 00:44:20.880
taxes and how they affect you. Are you looking for

657
00:44:20.920 --> 00:44:26.360
specific tax advice for self employed business owners and truckers.

658
00:44:26.920 --> 00:44:30.960
Are you behind on taxes and your bookkeeping? Are you

659
00:44:31.079 --> 00:44:34.079
dealing with the irs and ready to have some relief,

660
00:44:34.880 --> 00:44:38.679
Then you need Tax Talk for You, hosted by tax

661
00:44:38.760 --> 00:44:43.280
and trucker expert Barry G. Fowler EA. Tune in ten

662
00:44:43.360 --> 00:44:47.400
am Eastern time every Monday right here on W FOURCY

663
00:44:47.559 --> 00:44:50.920
Radio and Talk for TV. Don't forget to check this

664
00:44:51.119 --> 00:44:55.679
and past episodes at Tax talkforuth dot com. See you

665
00:44:55.719 --> 00:45:00.559
next week at wborcy dot com.