Tax Troubles and Single-Owner LLCs

The LLC is a relatively new type of business entity.  It was first created back in 1979 in the state of Wyoming by politicians who were effectively seeking a way to generate more tax revenues.  They definitely succeeded, but there was a fly in the ointment. 
           
Strangely enough, the IRS took little notice of the LLC until the late 1980s.  Why?  Probably because the IRS didn’t know quite how to tax it.  Was it better to tax it as though it were a corporation, or should it be taxed like a partnership?  What about formulating an entirely new section of the tax code to deal with such entities?  Since the IRS couldn’t really figure out just what to do, it gave people the option of having their businesses taxed either way.  Most chose to be taxed as partnerships, and that was the end of that. 
           
But states guard their territories rather jealously.  So, when the IRS finally figured out just what to do with LLCs, virtually every other state in the Union promulgated its own body of laws allowing for the formation of LLCs.  The most of these allowed one person to form such entities, although problems began to arise once these single-owner LLCs started filing partnership tax returns. 
           
To wit, it is a longstanding legal principle that partnerships are business ventures formed by two or more people.  This axiom is also reflected in the Federal tax code.  So, if only one person has formed a single-owner LLC, how could such an entity file taxes as a partnership? 
           
After some deliberation, the IRS decided to treat a single-owner LLC as a sole proprietorship for taxation purposes.  You probably wonder what this means to you.  Simply stated, the owner of a single-owner LLC has to pay the 15.2 percent self-employment tax.  Not a lot of people are aware of such a requirement, so they get an unpleasant surprise when tax time approaches.
           
In short, there’s nothing wrong in wanting to start an LLC.  Be aware, though, of this self-employment tax, and make sure you have the money to pay it.

Tips On How To Sell Your Home

When you are selling mercer island washington real estate or issaquah washington real estate, you need to be armed with an arsenal of knowledge. Although your real estate agent will be able to clue you in on several pointers, tips and helpful tactics on how to sell your home, it is important to have a strong understanding of certain facts on your own. This way you can get your property ready before you hire an agent and get it on the market as quickly as possible.

Tip #1 Clean Up Clutter

Make sure that all those extra knick knacks and stacks of books are picked up and removed from the rooms. You want to de-clutter each room as much as possible, even if that means removing some furniture.

Tip #2 Stay Neutral

If you have loud or bright colors in your home you might want to consider painting the walls white or something neutral. This allows the potential buyers to envision their own dcor in the home.

Tip #3 Finish Projects

Nobody wants to buy a home and have a honey do list already waiting for them. Get the projects on your to do list completed before you list the property for sale.

Tip #4 Curb Appeal

Clean up your yard, mow the grass, sweep the walks, plant fresh flowers, weed the flower beds and move trash cans from the buyers view. You want them to pull up to a neatly maintained and cared for property, not one with kids toys in the yard and weeds taking over.