Self-employment tax rules may exclude some LLC members
Article Abstract:
The IRS has released Proposed Regulations that provide guidance on how the self-employment tax should be applied to limited liability company (LLC) members. According to the Proposed Regulations, which were drawn up under Section 1402, LLC members will be considered exempt from the self-employment tax only if they would have been limited partners if the LLC had been organized as a limited partnership. Under the IRS's proposals, this rule should come into effect at the start of the LLC member's first year at a date no earlier than when the Proposed Regulations become final. The significance of these Proposed Regulations goes further than the clarification they provide on LLC members' self-employment tax since these regulations can also be used as a basis for interpreting other Code provisions that are solely applicable to general or limited partners.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1995
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Shifting income back to the present year can be beneficial
Article Abstract:
The best known tax planning strategies for taxpayers with fluctuating incomes are those that shift income forward, from high-income years to future years. Not so well-known are tax planning strategies that shift income backward so that in a low-income year, current income is supplemented. Techniques that can be used to shift income backward to a current year include the acceleration of accrual-method income by the moving up of shipping dates and contract closings; the deferment of accrual-method expenditures by putting off payments on items such as advertising and supplies; the acceleration of cash-method income through the prepayment of services; and the deferment of cash-method expenditures by any payment-delaying method.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1995
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LLC owners can avoid self-employment tax under new prop. regs
Article Abstract:
The application of IRS Proposed Regulations under IRC section 1402(a) to limited liability company owners is the subject of this article. The author focuses on the influence of the regulations on the payment of self-employment tax
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1997
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