LLCs often pay less in taxes due to their pass-through taxation structure, allowing profits to be taxed only once at the owner’s individual rate. With flexible tax classification options, deductible business expenses, and the ability to offset other income with business losses, LLCs can strategically reduce overall tax liability compared to corporations.

Wondering how much federal income tax you'd owe on a $55,000 salary? This guide breaks down the tax brackets and walks you through a simple step-by-step calculation—plus how deductions impact what you actually pay.

Small business owners determine their salary by balancing the business’s financial health, market rates, personal needs, and their contributions. This guide offers practical steps to help owners set a fair and sustainable compensation.

Businesses typically pay taxes on profit, not total sales. Profit is calculated by subtracting business expenses—like rent, materials, and wages—from total sales revenue. Tax authorities assess income taxes based on this net income, not the gross revenue earned. Understanding this distinction is crucial for accurate tax planning and compliance.

From a tax perspective, both sole proprietorships and LLCs offer pass-through taxation, but LLCs provide more flexibility and potential tax advantages—such as electing S-corp status to reduce self-employment taxes. Sole proprietorships are simpler and cost less to maintain, while LLCs offer limited liability protection and broader deduction opportunities. The better option depends on your income level, business risk, and growth plans.

Deciding between an LLC and a sole proprietorship? Learn how each business structure affects your taxes, liability, and flexibility. Explore key differences to choose the best option for your needs.

Wondering what it takes to start a small business? From choosing a legal structure to setting up finances and marketing, learn the essential steps every new business owner should know to get started right.

The IRS uses various tools to detect unpaid taxes, including income matching, audits, and information sharing. While not every case is caught immediately, failing to pay taxes can lead to penalties, interest, and legal issues.

Wondering how much you’d owe in federal income tax on $200,000? Here's a breakdown using the 2022 tax brackets for a single filer, plus an explanation of how marginal tax rates apply to your income.

Business taxes can be overwhelming, but understanding the basics helps you stay compliant and save money. Learn how taxes work for different business structures, including income tax, self-employment tax, deductions, and more.