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Updated over 8 years ago,
Llc flow through question
Hello . I'm just getting started. Currently have one property. I'm wondering how to best maximize taxes while staying legal. --
I know that businesses don't get taxed on their expenses, only the profits. From that standpoint it would make sense to have the business pay the debts rather than myself. If the money enters my personal account it counts as income to me and gets taxed as such, where the company paying it direct counts as business expense and saves taxes. --
My questions are : am I thinking about this correctly ? And is it legal / does it muddy the "corporate veil" protections. --
Example : I used a personal credit card to acquire this first property. Can the business pay directly to this account to pay off the credit card ? Or do I legally have to pay a salary to myself , then use that to pay off the credit card? The difference being ; 1) company pays direct to my personal credit account , thus counting as a business expense saves taxes. 2) company pays me salary , business expense , but taxed as income, then pay off credit card. --
I'm looking for staying legal , while maximizing tax savings.
Thank you for your time and wisdom