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Old 07-20-2017, 05:56 PM
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Mileage deduction with employee

I work in transportation, small vehicle and take mileage, 60k miles per year. I am an independent contractor. Is it permissible to create a LLC, not registered to me. The LLC takes the mileage option as opposed to itemization and I become an employee of the LLC, paid salary or wage. Thank you



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Old 07-20-2017, 06:47 PM
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I work in transportation, small vehicle and take mileage, 60k miles per year. I am an independent contractor. Is it permissible to create a LLC, not registered to me.=========> When you register your business as an LLC, it gives you legal authority to conduct business in the state in which your register However, not all operations require a business to register, but LLCs that do not register as required can face penalties.Your state's LLC office can tell you how to find out whether your proposed name is available for your use. Often, for a small fee, you can reserve your LLC name for a short period of time until you file your articles of organization. Besides following your state's LLC naming rules, you must make sure your name won't violate another company's trademark. Once you've found a legal and available name, you don't usually need to register it with your state. When you file your articles of organization, your business name will be automatically registered.


The LLC takes the mileage option as opposed to itemization and I become an employee of the LLC, paid salary or wage=========>>>>>>Sorry I do not think so. If you own an LLC, you pay yourself by simply taking money out of the LLC's account. Accountants recommend periodically writing a check from your LLC's bank account to your personal account. This keeps the company's books free of personal expenses. Whether or not you take the profits out of your LLC, you will still have to pay personal income taxes on it. distributions from your LLC are usually referred to as "draws" and they are fundamental different from the salary or hourly wage you pay employees. Salaries and wages have federal and state taxes withheld. You also withhold both the employee's and employer's contribution to Social Security and Medicare, known as FICA, as well as any other necessary deductions. However, when you take a draw, it does not run through any withholding. As such, you will also have to make your own estimated tax payments, as well as pay both the personal and employer side of the FICA payroll tax contribution as self-employment tax.in the case of MMLLC, From a legal perspective, there are no "partners" in an MMLLC, only owners, or "members." State laws differ, but in almost all jurisdictions, members, like partners in a standard partnership, cannot be W-2 employees. Most states specify that members will receive their proportionate share of MMLLC profits, as stated in the company's operating agreement



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Old 07-20-2017, 08:02 PM
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Thank you for your reply. I wish to clarify my question. Can someone other than me, friend, relative etc, establish an LLC. I become an employee of this LLC. This would require formal payroll for me. In this environment can the owner / registrant of the LLC deduct, as the accounting method, mileage for the use of the vehicle. I am then paid a wage or salary as the operator of the vehicle. thank you



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Old 07-21-2017, 12:24 AM
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Originally Posted by bigfish2112 View Post
Thank you for your reply. I wish to clarify my question. Can someone other than me, friend, relative etc, establish an LLC. I become an employee of this LLC. This would require formal payroll for me. In this environment can the owner / registrant of the LLC deduct, as the accounting method, mileage for the use of the vehicle. I am then paid a wage or salary as the operator of the vehicle. thank you
Can someone other than me, friend, relative etc, establish an LLC. I become an employee of this LLC. This would require formal payroll for me.=======>>Of course unless you are a member of the LLC as said previously;clearly Members (owners) of an LLC cannot be considered ?employees? of the business unless the LLC elects to be taxed as a corporation?either an S corp or C corp. If an LLC has employees, the business must pay employment taxes, including withholding and reporting federal and state income taxes, paying and reporting FICA (Social Security and Medicare) taxes, worker's compensation taxes, and unemployment taxes to the state /IRS.


In this environment can the owner / registrant of the LLC deduct, as the accounting method, mileage for the use of the vehicle. I am then paid a wage or salary as the operator of the vehicle=========>If THE LLC has employees and they may use their cars for business purposes, perhaps to make sales calls, make deliveries, or pick up supplies or equipment. If this happens often enough, the llc may decide to reimburse the employees' expenses for using their car ors to provide a company cars or trucks for their use. If you, the llc, don't reimburse your employees for vehicle expenses, the employees will generally be able to deduct these expenses on their individual item tax returns, as a miscellaneous itemized deduction on Sch A of 1040. Given the limitations on employee business expense deductions, your employees will probably come to resent a non-reimbursement policy if they use their cars for your business on a regular basis. Therefore, you will probably end up choosing to reimburse employees' expenses or provide a company car. On the contrary, if you reimburse the employees for vehicle expenses, the tax treatment hinges on whether you use an "accountable plan" or a "nonaccountable plan." Reimbursements made under an accountable plan are deductible business expenses to you, and are excluded from your employees' taxable income on their W2s ; A non-accountable plan is a reimbursement plan or policy which does not meet all the requirements for an accountable plan. Amounts paid under a non-accountable plan are income to the employee and must be included in wages with appropriate tax withholdings.so it depends which reimbursement plan the LLC chooses



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