need some accounting advise!

[Brian Roberts]

Any advise on how wholesalers can claim a W2 income to build credit and establish a paper trail of legitimate income. I know some have set up an LLC and pay themselves a salary out of that corp each month. Is this a smart move or is there a better way?

[Leon D.]

Assuming you need someone to advise you by giving you advice, here's one answer to start you off:

An LLC cannot issue W-2's, since an LLC doesn't have employees. An LLC has members, who get taxed as individuals (that's why an LLC is considered a disregarded entity by the IRS). To get a W-2, you would need to form a C-corporation, make yourself an employee, and have the corporation pay you while also withholding income taxes, FICA, SUTA, etc.

This leads me to a more simple plan: if you insist on an LLC, you'll have to report the income on your personal return, so a bank will see the income anyway. Less than ideal, but in some ways easier than the corporation angle.