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LLC question

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New Visitor

LLC question

I have student debt that’s in collections and when I do my tax returns, the IRS withholds it to pay on that debt every year. I was curious if I file as an LLC, will the IRS be able to withhold the funds from my business taxes? Im definitely going to be talking with someone about this but I’m just curious if anyone here may know.
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Frequent Contributor

Re: LLC question


@Bethmit6373 wrote:
I have student debt that’s in collections and when I do my tax returns, the IRS withholds it to pay on that debt every year. I was curious if I file as an LLC, will the IRS be able to withhold the funds from my business taxes? Im definitely going to be talking with someone about this but I’m just curious if anyone here may know.

I believe if you are a single member LLC, you will file taxes as personal, but then include a schedule C indicating the tax info for the business, so I don't see how you can bypass this forced repayment.

Message 2 of 5
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New Contributor

Re: LLC question


@Bethmit6373 wrote:
I have student debt that’s in collections and when I do my tax returns, the IRS withholds it to pay on that debt every year. I was curious if I file as an LLC, will the IRS be able to withhold the funds from my business taxes? Im definitely going to be talking with someone about this but I’m just curious if anyone here may know.

By default, Federal income tax returns for a single member (one owner who owns 100%) LLC are the same as for a Sole Proprietorship, you file the business profit/loss information as part of your personal tax return.  However, LLCs may elect under certain conditions to be treated as other types of businesses for tax filing purposes, and you really need to explore that option with a tax accountant and attorney before making such an election if it is available to you.  For credible advice concerning your question, you need to get an answer from a licensed professional.





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Message 3 of 5
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Community Leader
Super Contributor

Re: LLC question

Good advice has been givenSmiley Happy

My rebuild worked for me, but won't necessarily work for you!
BK7 D/C- 08/2013
Message 4 of 5
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Senior Contributor

Re: LLC question

There are much better ways to go than an LLC.   Our little biz which does reasonabley well is a series of LP, LLP, S Corp and C corp some in our state others in another state.   I am a retred CPA so I have the knowledge but still pay  Turbo Tax way to much for their software. If I had to pay for all the filings of tax returns at regular rates for tax prep my bill would be around  $10,000  A single small biz return runs usually $500 and up depending on issues.  Unless you have tons of experience don't try it your self.  

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