Question

1. John operates a Limited Liability Company, Unity Landscaping, LLC., and has earned $100,000 in gross revenue for 2019. There are 2 members; John and Mike, and each are equal owners.

Sally operates a corporation, United Help, Inc., and has earned $80,000 in gross revenue for 2019. Sally is the sole owner.

It is now time for both to handle their taxes but they are unclear on how the structure works and how they handle their taxes for the companies. The business tax rate is 28%, and the personal tax rate is 25%. Calculate the taxes for the owners and companies so they can all know and understand their taxes:

Answer 1

As per the Below Write up please se the calculation of taxation:

Individual taxed: John (share 50%) = $50000 * 25% = $12500

Mike (share 50%) = $50000 * 25% = $12500

As in the other case sally is the sole owner of United help Inc. and taxed 28% and also get dividend which is taxable or not in there hands.

LLCs use "pass-through taxation," which means the LLC does not pay taxes. Income from the business is instead passed down to the company's owners, who are called members in LLCs. They claim the profits or losses on their personal tax forms. ... Because an LLC does not have shareholders, it has a different tax structure. on the other hand Many US businesses are not subject to the corporate income tax; rather, they are taxed as “pass-through” entities. Pass-through businesses do not face an entity-level tax. But their owners must include their allocated share of the businesses’ profits in their taxable income under the individual income tax. Pass-through entities include sole proprietorships, partnerships, and eligible corporations that elect to be taxed.

Company income subject to tax is often determined much like taxable income for individual taxpayers. Generally, the tax is imposed on net profits. In some jurisdictions, rules for taxing companies may differ significantly from rules for taxing individuals. Certain corporate acts, like reorganizations, may not be taxed. Some types of entities may be exempt from tax.

Countries may tax corporations on its net profit and may also tax shareholders when the corporation pays a dividend. Where dividends are taxed, a corporation may be required to withhold tax before the dividend is distributed.

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