Why You Don't Need AN LLC to Start Your Business & Influencer Tax Myths with @TheSelfEmployedTaxGuy

so you need an LLC to start you need LLC no you do not llc's are so overrated and that is because it is like check it out before we start I want to invite you to my next Workshop I've been doing a few here and there but I'm ready to invite you all to the next live Workshop so make sure y'all click the link down below t-shirt mastermind.com this is where you can come and ask me all of those questions that you may have and it's hard for me to respond to in the comment because you guys know I need to be responding to you just like this alright so if you guys have any questions I'll see you guys at the workshop and for those of y'all who don't know how to get started in this game yet you know I'm going to show you guys how to get started I'm going to show you guys how to find some winning designs I might even show you guys some of the AI processes that I've been using for my print on demand shops so make sure you go ahead and click the link check it out this is someone who was in the last Workshop I got a lot of nuggets rich and amazing information at your Workshop session you really helped me changing my frame of mind to take action and start believing in myself and take the future of my family and myself into my own hands there's a lot of people who was in these water shops but now we're about to do it big make sure you guys click the link I'm Gonna Be Live I'll see you there what up what up my name is Rich welcome back to another video this one is going to be so special because it's the beginning year this is information that you need about the homie Tyrone on big shout out to make some uh t-shirt style hustle because this is how we met but uh go ahead and introduce yourself man well first of all Richmond I'm I'm honored to be here on your platform to speak to your people man because I I appreciate and respect what you do giving people real true genuine non-sleazy game bro I appreciate that it ain't too many people doing that but uh rich like I said my name is Tyrone Gregory um the self-employed Tax Guy owner of the self-employed tax company and for those who are in my community I'm known as their favorite uncle cousin we all family here man my goal is to really help people you know start a business minority startup businesses become successfully self-employed Man by helping them navigate through the jungle of everything that's out there about business bro so yeah let's go ahead and get to it okay there's I already got the first question for you because I see the T-shirt man I see that t-shirt representing please understand this statement right here don't do it do you need an LLC to start you need LLC no you do not llc's are so overrated and that is because it is like a buzzword on the internet like if you if this is why like I created this here man because so many people feel that they need an LLC to get started but yet at the same time so many people like man I can't start because I don't have an LLC and I'm like that is the farthest from the truth and that is why uh I'm so upset with the idea of the LLC listen you do not need an LLC to start your business I'm gonna tell you what an LLC is and LLC is a false hope it's instant gratification right people think oh I have the LLC I have a business no you don't you got a piece of paper that says you have an LLC right and that's literally all it does like I promise you you do not need an LLC to start your business man it's it's crazy what people think they need to do to be out here starting businesses like I I'm an actual Tax Repair right I'm at the desk with actual people like I am seeing the bad side of ambition you know what I'm saying and it's like yeah I had a young brother in here the other day was like man yeah I heard that I can get an LLC and take my uh my W-2 earnings and put that into a bank account and use that as my business earnings and I'm like I'm actually with the people and I had to educate them I said let's look at your W-2 so I'll tell them to look at it I said you see box one of your W-2 right that's how much you made that's your earnings and he was like yeah and I say you see boxes two four and six and he's like yeah I said that's the taxes you paid on that money I say so you telling me you want to take this money put it into a bank account right get an LLC you put it into a bank account and treat that as income so you already paid tax on it as you can see and so you want to put it into a business bank account so you can pay tax again yeah and he was like oh I they didn't say that I said I know they didn't say that but they're not gonna say that because it makes them look good that they know so yeah dude is here's the game imma give you this play and it's like bro we out here killing ourselves trying to form LLCs bro so I mean I know I just went on a long time and I apologize but nah LLC is like a hot button for me man because it's it's terrible and I'm gonna tell y'all now do not form llc's in Wyoming Delaware and or Nevada because that's a myth that's a lie video coming soon for that one man because they they lying the folks on that one so no not at all no I like that people get LLC so they can change their bio to CEO yeah that's like what does that do for you like if you really trying to start a business the LLC should be the furthest thing you should be trying to do you need to figure out a system to be able to get customers on a consistent basis because that's really all you need to have a business you need a product and or service and a customer who's willing to buy it if you don't have those two you ain't got no business right when I first got into Ecom like it was 2013 I had an LLC but it was like the business name that I chose didn't even work out so then like I had to abandon that in 2014 when I started back up I didn't even have an LLC I was just like forget I'll just use my social like it asked you for your social so I just type it in and they still send you what what is it called like the 10 1099 or something yeah the 1099 yeah yeah they still send it to you you can still you can still do your taxes the same and all that so yeah absolutely I don't want people thinking they need an LLC to start when you just start today no no honestly man and that's why I appreciate watching your content like you know you are you really out there helping the people really get it in bro like you would tell them you don't need this to start the business and you actually show them like yo this is how you do it you don't need all this extra stuff you don't need all of these fancy stores fancy equipment do this and you good now that's that's why I like I'm glad to be here because our rocks with people that give people genuine information to help them get started long term you know what I'm saying so yeah for sure all right so can I still write things off without an LLC absolutely absolutely an LLC again man like I said it's that instant gratification people are hyping things up like oh if you have an LLC you can write off more that is a bold face lie they are lying to you why because let's look at the laws right uh the IRS treats single member llc's which is just uh one owner LLC they treat them as disregarded entities meaning that you're going to be for at least for tax purposes treat it the same as a sole proprietor meaning you're going to be under the same laws rules and regulations and compliance uh uh obligations as a sole proprietor so you can write the same thing off as a sole proprietor as an LLC it's not like oh if I get an LLC that hundred dollar gas receipt is all of a sudden gonna give me a 200 worth of expense it's still going to be worth a hundred dollars regardless there's absolutely nothing different having an LLC as opposed to being a sole proprietor the same exact I mean even I hate it but even the whole G-Wagon play you don't need an LLC to do that you can do that as a sole proprietor if it makes Financial sense for you to do so llc's is really just hyping people up getting them all excited for them to do nothing nothing special all right so all right let's talk about the pros and so what are the actual benefits of you know you know actually getting your business set up properly you know LLC or so on to having an LLC don't don't get me wrong I'm wearing this shirt because the the the negative side is is being glamorized too much right so the proper side of having an LLC is what I call the loan game if you know for a fact you're trying to extend your business Beyond The Five-Year Mark which is where you know statistically 80 percent of businesses don't go beyond five years if you know for a fact you want to go um towards that five year mark then look for an LLC probably in year two right in that case why because after year two you've established your your client base you've established your systems now we want to switch it over to an LLC because we want to start looking into expansion and then now comes into play business credit right like a lot of people saying oh if you want to get 250 000 in business credit go get your LLC tax ID and I'm like but then if you listen to them at the end they say but you personally need to have a 680 credit score well if if it's going to be on me what's the purpose of the LLC right so I'm telling people like yes work on yourself first then get the LLC because what happens especially for tax purposes once you reach a certain income level like for me my threshold is a hundred thousand net profits if you can say that you know after you spent your expenses what's left over is a hundred thousand by all means getting LLC have it be taxed as an S corp because at that point it's going to save you money in self-employment taxes but if you're not at that Mark yet then it's going to cost you more than it's going to uh uh save you yeah you can say oh man I saved 1500 by switching to this LLC S Corp setup but yeah but it cost you three thousand to do it so you kind of went backwards so I you know it it comes a point where when you're making money obviously more money means more volume uh more value brings on more liability because that's another thing people say oh LLC is going to protect my assets not if it's not set up properly uh which 99.9 of the llc's aren't because people just form them and go about their business there's a lot of things you got to do so the the pros to an LLC is one when it makes Financial sense it can save you money uh another Pro to an LLC is if it's set up properly meaning that the business owner or should I say the business is no longer dependent on the owner financially uh operationally everything if that's set up properly then the LLC can have a little bit more weight in court and help in case of lawsuits but don't you know it's not a hundred percent right keyword being limited not a hundred percent absorbed right um so it does have its benefits man especially if you the long game right man that's why I like you man you spell the truth that's why we need to get you some more followers because you know okay we'll get into some more of the Memphis at the end but I do like the fact that you're talking about the 250k um whatever the credit whatever yeah yeah most people who who's gonna aim after 250 000 you know don't even know what to do with 250 dollars first anyways because you said the right thing right there bro like if you go get it what you gonna do because it's not free money you got to pay it back and if you don't have a plan to pay it back what you doing with it exactly yeah yeah but that's what a lot of people don't like it tells you yeah you get an LLC and you go out and get this money is but the LLC is not the one that's obtaining the money the individual is so if the LLC defaults and they've almost just file bankruptcy that's fine they still coming after you personally because you personally guaranteed the loan right you know not a lot of people getting caught up like they're like oh man well they didn't say and I'm like I get that they didn't say but at some point we should be able to put two or two together right you know what I'm saying like let's just not depend 100 what they say if you are personally guaranteeing it that means you are personally liable regardless of the LLC all right all right let me get let me let me slow it down all right so how do I pay because I know there's like all kinds of like state tax remitting like online so how do people are supposed to pay like most of the people who watch this uh do e-commerce so like a lot of sales come from online all over the place how are they supposed to be doing taxes you know what uh sales tax man that's definitely one of the biggest taxes that affects the the e-commerce industry right especially since Wayfair versus South Dakota all of these states now are going to impose state tax the key thing here is to understand the economic Nexus right like um do you have enough presence economically in that state to trigger a sales tax that's what's going to be the main thing for people in e-commerce business is to focus on that I know like uh Shopify and see those stories like that they have systems or at least apps that you can plug in that'll help you track which state is going to require you to pay do note that the state that you actually operating your business is business end you definitely should register with that particular jurisdiction to get that sales tax and remit sales tax to them cover your butt where you sit at but for all the other states one don't just go registering please do not register for every single state just because I know a lot of people like I want to be safe I want to be you know precaution do everything let me go register for every single state don't do that it's going to be a nightmare for you is and if you try to hire somebody man to clean up work costs that's what I try to avoid like don't the cleanup work costs money because once you register with these states they automatically assume you owe them money they start sending you notices demanding money and you may not have even met the threshold to even pay them yet so that's the first thing do not go register for every state what I would do there are free resources man um out I can't pronounce it aloe vera the a-l-v-a-r-a right there are they are an online uh sales tax application like they do everything sales tax there you can go to their website and you can click on resources and it'll give you a map of all the states and what you can do right you can write down or just bookmark that uh resource and they tell you what the threshold is for each state right like say for here in California you either have to have uh 2 000 sales or two hundred thousand dollars worth of transactions before you be out obligated to submit sales tax to California so if you are in Nevada and you made maybe 10 sales to California you don't owe California nothing right so don't register because the minute you do California gonna be like Hey where's my money you know so the best thing to do is to really understand the threshold for each state that the whole economic Nexus for each state and once you understand that keep track of it you can look at your your sales dashboard did it tell you or it should tell you what what state your sales are coming from and you will match that so for example if you say uh you're looking at your dashboard and you see a lot of income coming in from Virginia so to speak right then you go to Virginia say that that big amount is 10 000 came from Virginia but you go to Virginia they say oh well you need 20 000. well guess what you cleared you don't have to remit nothing you know what I'm saying so check that for each one and you'll be good to go save yourself a lot of headaches all right for most people it's not a problem right right exactly when you first starting off it's not a problem but again make sure you do register in your state though okay yeah I was just about to say so what about your own State like still like check for threshold you should just be paying that no matter what or is that yeah no matter what yeah there's the states where you are because you're you're in the say for example I'm here in California right California has a threshold for Outsiders but for me the fossil a dollar I better collect that sales tax and give it to them you know what I'm saying so every state is going to want theirs from their residence so make sure you do it in your state right and also make sure you charge in sales tax too though because if you're not charging sales tax you're eating away at your profit because a sales tax is not a tax on you it's a tax on the consumer and you're just a third-party collector right so it's just me me and Rich right Rich buy something for me the state says okay well we charge a 10 sales tax if it's a hundred dollars the rich owes the state ten dollars so I'ma charge 110 right rich is going to pay it I'm gonna take my hundred dollars put it in my bank account and I'm gonna take that ten dollars and send it to the state but let's just say I didn't collect it the state says well you still owe us ten dollars so now that's ten dollars coming out of my Hundred so instead of making a hundred dollars I now got 90. so I just reduced my profit for for nothing right and that's why it's important to get your resale license in so you're not going to move taxes twice so when it comes to getting your resale license do you need your LLC then or that you can just do it with an EIN or man the power of a sole proprietor to manage the fact that you can do any and everything as if you were you know the big the only thing you really can't do as a sole proprietor is pay yourself on a W-2 and sell stocks ask if you think about it that's outside of that you can do everything as a sole proprietor as you would any other Corporation any other business you just can't pay yourself a W-2 wage or sell stocks but honestly as a sole proprietor paying yourself a W-2 wage wouldn't make sense it's just an additional cost for nothing right because it's going to be the same result right all right so one of my final questions before we get into like a quick little fact check game so people should people be doing this themselves or should they hire a CPA you know what um great question man and I will say it depends on your level of one knowledge and confidence because there are people like I said I'm at the tax desk and I and I get in trouble for it because all my peers you know they'll be like man why you keep trying to send people to Turbo Tax I'm like cause I feel guilty charging somebody for something you can really go do on TurboTax like if it's just you and a W-2 why are you paying somebody you're gonna do that for free because it's gonna ask you software today technology today has has definitely Advanced right it's gonna actually will what's this what do you have in box one so if you can look in box one and type in the numbers that you see is you can do it right for free save yourself some money but if you're not confident in that or you get nervous uh you think you may mess up some numbers by all means I would say hire somebody because like I said clean up work costs extra you know you could pay they'd be like oh it's expensive right so yeah it may cost you for most businesses maybe let's say you pay somebody 500 bucks to do the return you'll be like oh well that's expensive I'm gonna go do it myself but now you mess up something the IRS is out there you said now you got to pay still the 500 plus another you know maybe extra couple of hundred dollars for somebody to go represent you in the IRS quarter law so I would say if you're not confident then by all means higher professional if not at least consult with one by all means at least consult with a professional maybe you don't pay them to do the tax return but paying maybe like 100 bucks like let me just make sure I understand my situation let me make sure I got everything I need to move forward and once they get information and then you feel more confident then go for it yeah I have zero confidence okay last year was not doing so I might get a switch over to Tyrone hey hey man it's cool we can make it happen all right so all right so I got you already started answering someone you just talking about a G wagon but I got some influencer tax guy missed for you because I I know you like that so we're going to fact check okay first one it's hiring your children oh so in fact it is fact you can hire your children right you can hire your children at at any age uh to work for your your company but the thing of it is you actually have to hire your children now you just can't say oh I hired my children I'm gonna pay them up to the standard deduction in your mind and there's no paper trail and and and then just write everything off it's not gonna work like that so if you have children right especially men like with people in the T-shirt game it's so easy to hire your children you can have them you know do the heat press you can have them fold you can have them ladies so many things you can have your kids do just make sure you actually have the paper trail to support the fact that you hired your children because one the reason people want to hire their children is because they want to be able to one write off the amount that they pay them right two they want to be able to take the income that their children earned per se and put that into a Roth IRA so they can start Building Wealth for their children tax-free beautiful strategy right I say absolutely do it but think about it if you putting well let me say not you think about it but here here's the deal if you hire your children in your mind and you take money and you put it into this Roth IRA in your child's name and there's no paper trail there's no actual earned income well there's a penalty of six percent of the income you deposited per year until you remove that money from that account right so it's like what's the point of putting money in there if you're trying to establish wealth and build wealth when you're getting penalized on it because you didn't do it properly in the first place plus you don't want to make you you don't want to get in trouble with the Department of Labor because the Department of Labor has strict rules around hiring your children right there especially if they're in school right you got to make their certain hours they have today they cannot work they can work uh there are so many hours they can work so it's kind of like if you don't have that paper trail yeah no it just don't do it yeah yeah but again know that you can you just have to do it properly because if it's not done properly meaning that you really have to get a payroll company involved because you really have to put them on payroll you have to submit payroll to both the federal and state agencies right like you have to fill out the actual forms to do so you have to issue them a W-2 at the end of the year it everything has to be there and if you're not doing that you're doing it wrong and I've heard people say oh I'm hiring my challenge independent contractor think about that let's really think about that if you hire an eight-year-old is he really independent is he really conscious is he really have a business like you you really setting yourself up for that like and there's laws really getting to that because a lot of people find it easy to do 1099 because there's no paperwork I'ma just at the end of the year she get 10.99 I ain't got to do nothing disaster they they cracking down on that so please do not pay your child independent contractor and then think you're about to go do all these things with it it's just it's just not gonna work then they gotta file income tax yeah yeah but thank you it don't make sense if your goal is to try to save money for them because think about if you pay your eight-year-old up to the standard deduction right because the standard deduction is what we limited as because if you're under the standard deduction which for this year well for 2022 the standard deduction is 12 950. so if you pay your child 12 950 bucks they don't pay taxes because the standard deduction will Zero out their taxable income right no taxes paid you get to write off 12 950 they can put six thousand of that into the Roth IRA because that's the max you can contribute right the other six thousand they can keep and go buy whatever they was going to buy the Jordans the the Xbox the PlayStation because you was gonna buy it anyway right but now you just converted that into income and you wrote that off so it's a win-win on that on that instant but imagine doing that as an independent contractor yeah 12 950 is an independent contractor you giving your child uh uh 10.99 they have to file that now they're subject to the self-employment tax of 15.3 percent of that and who gonna pay the parent so why so why did you do it in the first place yeah don't make no sense man so just don't do it unless you're gonna do it right exactly I got one more for you because that's so popular I think it's like over I don't know how much the weight is but I keep seeing it it's like go buy a G wagon so you can write it off what's up with that oh man it oh how could I say this you know like since the history of time mankind has been attracted to shiny objects you feel me like if we if it shines and it Glitters in this gold we want it and so people take advantage of the idea that I could go get some shiny and benefit from it the G-Wagon oh man I hate this night so [Applause] the play is this you go by this G wagon and last time I looked g-waggers at the low end 200 000 the high end maybe 370 right so you can go buy this car and as long as it weighs over 6 000 pounds you get to qualify for What's called the Section 179 depreciation in Section 179 IRS gets lazy because it's named after Section 179 of the IRS code and it simply says you know if the vehicle weighs over a certain amount uh you can write the whole thing off in the first year right so the play is this well that's what they call it I'm gonna give you this play you go by the G wagon and granted you ain't about to put 290 000 for the car you're gonna probably put 10 10 5 10 000 down cool but now you got this big write-off of 200 some thousand dollars which is beautiful I I admit that it's beautiful but here's the thing what about next year because if you're a true business owner if you really trying to to get your business off the ground if you're really trying to have your business support your lifestyle financially it's not a one-year thing right so if you get the G wagon you write it all off in that first year what about next year when you make money you ain't had nothing to write off what you gonna do go buy another G-Wagon you ain't gonna do that right like like what's the point you know what I'm saying like what about the year after that so you're not gonna have nothing so to me it don't make sense it sound good because I get to go buy a car and write it all off but then also let's think about this if somebody was to go by the G wagon let's assume they make a lot of money right the G wagon let's just say for purposes let's get 290 000. their taxable income 290 000. so they gonna buy a G wagon so they can zero that out right because that's the goal I don't want to pay no taxes so for me to pay no taxes the double benefit is I get to go get the car I want and write it off and pay zero taxes at 290 000 when I ran the numbers it was either 200 or 290 or somewhere or somewhere over there the tax was fifty thousand dollars so at 290 the tax that was over was fifty thousand and I'm like let's pause right there you want to go spin because even if you don't spend it you know uh the 200 000 in that year you put five thousand down you still obligated to pay that it's not just gonna go away so even within the five year span you're still going to end up paying more than that because taxes and interest so you really just spent 250 000 dollars to get rid of 50. what what sense does that make yeah it don't but but it sounds like yeah oh man I get to go get this and then yeah the IRS is paying for it no they're not that I hate when people say the IRS to pay for it no yeah you paying for it the IRS just said all right well we ain't gonna tax fifty dollars we're not going to tax 50 000. so you spent 200 some thousand dollars to say 50. that don't make sense and even as a business owner that shouldn't make sense nah it don't make no sense it sounded like the only trick is to start a YouTube channel [Laughter] go ahead no I'm gonna say now I will say this just to be honest and to be fair if you are not necessarily trying to be a business owner and you strictly want to just do a quick hustle right just to uh you know fund that trip to Dubai for that trip to Jamaica Thailand or something and you're just doing the quick hustle and you're happy to make a lot of money right he's like oh man yeah I made a lot of money this year I need something to write off right well if you know you're gonna do it that one time and you ain't gonna do it again yeah that makes sense yeah you know then by all means you know trick it off if you got it you know what I'm saying but if you really trying to play this long game if you're trying to win in this as an entrepreneur yeah man you could you got to make better decisions yeah but see like the one that you just mentioned those benefits make sense if you went in for the long term anyways because then you'll have that extra money to actually do do it the right way yeah do those things instead of like trying to go get a G-Wagon financed and like hey that amount at all or so yeah that makes absolute sense all right so man that was 30 minutes solid bro I was learning so much man y'all gotta follow my guys let them know where they can follow you at man we're on YouTube they can find me at the self-employed taxi guy that's why I really drop all the long form or the free try to give people as much game to help them make you know some informative decisions that's there uh on social media on Instagram also at the self-ploy tax guy uh I'm new to tick tock you'll see me there but you know if we being honest whatever we post on Instagram we post it on Tick Tock anyway so you know it just just choose whichever platform you are we go from there all right so that's self-employed tasks gotta make sure y'all follow them y'all not gonna get those crazy loopholes tricks you're gonna get the truth and that's what's really going to help you absolutely absolutely appreciate y'all watching comment like subscribe we're going to see y'all next time yes sir

Channel: Hustle Ninjas

Views: 10,911

Keywords: Why You Dont Need AN LLC to Start Your Business, llc how to, llc vs s corp, llc how to start, llc holding company, how to get a llc, how to get a llc in texas, how to get a llc in georgia, how to start a llc step by step, how to start a llc, do i need a llc, do i need a llc to sell on shopify, what is a llc, llc explained, how to start a business

Id: QpNcpKwMYOE

Length: 32min 53sec (1973 seconds)

Published: Sun Jan 29 2023