California LLC setup for expenses?

[Ted Sung]

Hi All,

I've been pondering about this so I thought I query the forum.

I'm a newbie investor and so far I have not purchased a property yet. However, I've been looking, researching, etc.

I'm wondering if it's feasible to set up a LLC so I can deduct some of the expenses associated with "the business"? I know there's no way around California LLC (for income) unless I move out of the state. However, is it logical to think this way...that is, if I setup a California LLC, which costs about $800 a year, and if I have yearly expense of $800 or more that I can deduct (from subscriptions, conferences, traveling to see a property, etc.), then it's worth it? Down the road, when I do move out of the California, I can move the LLC or set up elsewhere?

Thanks in advance for your comments and feedback.

Ted

[Dennis Maynard]

@Ted Sung it's a great question. First, I recommend you speak with an accountant on the matter. Generally, it won't save you money until you are exceeding a certain amount of income, somewhere around 100k a year. This is why I recommend you speak to your accountant. I would also inquire as to a list of deductions. You should be tracking your expenses and mileage regardless. A quick tip on this, log each travel expense location in your calendar with address every time. Then you can go back later and document in a spreadsheet. LLC's are typically for asset protection. I personally prefer S-Corps for what you are describing of personal income and business. I'm not an attorney, so please consult with one. Hope this helps.