Running Income and expenses through an LLC

[Joe Stout]

Hey everyone, I've been told a million times to start running my income and expenses through my LLC. What is the purpose of this? I am worried about running it through my business and then becoming less "bankable" to lenders when asking for a HELOC, loan, etc since I will not have had 2 years of rental history within my same account. Was just turned away from a HELOC because I dont have two years of rental history for my assets since my first asset I bought was in May 2021.

Thank you and Happy Holidays!

[Lucas Miles]

@Joe Stout if you have an LLC and that LLC owns this business then yes your income/expenses should "run through your LLC".

From an asset protection standpoint the purpose of an LLC is to separate your business from you personally. If your business gets sued, they can't go after you personally. If you personally get sued they can't go after your business. If you are not correctly running your books through your business a good attorney could "pierce the corporate veil" removing this separation from yourself and your business.

From a tax perspective, unless you have an S or C corp, your LLC is a disregarded entity, therefore its taxes get passed to your personally. If you were denied because you don't have 2 years rental history, is seems it would only help meet this 2 year rental history if you would have been running through your LLC (not to mention the other reasons I discussed) - Disclaimer - Not a CPA or attorney.