Distributions and taxes for an LLC
Hey BP,
I am considering forming an LLC with two other partners and I wanted to understand the tax implications of that.
- Can we choose to not have any distributions and "save" the money in the LLC for future investing tax free? I.E. if we don't distribute it, is it still "passed through" taxed?
- How complicated to taxes on partnerships get? Is it more or less complicated to me on my to have a partner
Most Popular Reply
If you make money, you will have to pay taxes whether you distribute or not. Most Partnerships actually do a distribution just to cover the cash needed for the partners to pay the taxes on the partnership income.
Also, have a CPA do your partnership taxes and have an attorney draw up your partnership agreement. Good luck.