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Jake Charlson
Taxes - Personal or through an LLC?
Posted by Jake Charlson
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11/23/2014
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Comments (3)
General
Hi,

I've just been looking at tax stuff just in case I win something at some point. I have been dealing with the question of whether to have any winnings issued to me personally on a 1099, or to my company on a 1099. I've been told that I can save almost 1/2 in taxes by going through my company instead of me personally. Does anyone have any more information about any of this? It's all really confusing to me.

Thanks!
Comments (3)
Ingrid Vining
Ingrid Vining
11/24/2014
You are welcome to contribute to Tongal either personally or as a company. Once one of your submissions is selected as a winner, you will be required to upload Winner Forms - at that point you can choose how you'd like to be paid. You can view the Winner Forms via the link at the bottom of the site.
Gray Cat Films
Gray Cat Films
01/23/2016
Assuming your LLC is a single-member LLC, the IRS considers this a "disregarded entity" and any profit or loss from the LLC flows directly through to your personal tax return, same as if you were a sole proprietor. If your LLC is a multi-member LLC, the same flow-though principal applies to each of the members although your taxes and accounting will be more complicated. In either case, having tongal 1099 your LLC does not save you any money in taxes. You can also structure your LLC as a corporation, which I can save you money in taxes but is only worthwhile for people making big bucks. This is my understanding as a small business owner (I am not an accountant).
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