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gyannelli
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Joined: 09 May 2007
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Posts: 37
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| Posted: 14 Oct 2009 at 12:37 | IP Logged
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I have a tax question: If I form a multi-member LLC and elect to be treated
as a partnership having no employees (owning members do all the work) (1)
what are the tax liabilities of the LLC? (2) Are the members subject to
withholding taxes on their distributions?
Thank you in advance for your help.
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txcpa08
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| Posted: 27 Oct 2009 at 17:17 | IP Logged
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1.It is just a flow through. you get a K-1 from the partnership and enter in 1040. You are taxed through 1040 and will be liable for self-employment tax.
2. no w/h specifically on the distributions [w/h applies for non-resident partners]. But you have to pay est. tax on your income if you want to avoid est. tax penalty later. If your distribution from the PS exceeds your basis in the partnership, then the excess amount is taxed as CG.
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break75
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Joined: 28 Oct 2009
Location: United States
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| Posted: 28 Oct 2009 at 17:35 | IP Logged
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Don't forget the probable Self-employment tax issues that anyone who "works" in the LLC should be allocated a Guaranteed Payment on the K-1. This is the member's "salary", or draw, directly related to the amount of work he/she performs, and it is deductible by the LLC.
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Topic: LLC Tax Liability
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