We started an LLC (doing handyman repairs) in the last month and primarily get paid through Venmo and Zelle. We have two areas of questions:
1. What is the approximate percentage of income that goes to taxes? If the business makes $20,000 for the year through cash apps alone, is there a way we can figure out a ballpark number of what we should put back? Will we have to report it separately from income that comes in cash or check form?
2. How do we prevent our income from being double taxed? We are personally filing married-jointly and are planning to file the LLC as an S-corp to try to prevent double taxing the same income. I was told we get the 1099-K to report cash app payments but then we also have to list it as income on our personal taxes. Do you have any training videos on how to file as an S-corp and prevent double taxing the same income?
For question #1 - Use TaxCaster Calculator to estimate your taxes
For question #2 - See this article for tax treatment of S Corps
S Corps tax treatment
see the sections:
"... an S corporation doesn’t pay any tax to the IRS. It is treated similarly to a partnership in that the income and deductions “pass-through” to each shareholder to be reported on their personal income tax returns in proportion to their respective shares of ownership."
- AND -
"In order to operate your business as an S corporation, you must satisfy a number of IRS requirements first. Your business must operate as a domestic corporation, have only one class of stock and have no more than 100 U.S. shareholders."
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