# Creating a LLC to pay yourself



## Jimmy Bernat

So here is the question I want to ask . I know it's very hard to get any type of loan with the majority of your families income coming from 1099 Rideshare driving . 

If you start an LLC or Scorp could you have your lyft and uber accounts deposit into a business account and then have a business checking /debit account that handles all of your expenses and then pay yourself the net earnings with a regular check either 1099 or W2 ?


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## IERide

I have an LLC (created it for something else, but still use that bank account for Uber income) - all of my Uber and other income goes into that account and I then "pay" myself once a month.. But if you are the only employee, it's a sole-proprietorship, which the banks still see as 'self employment income' so it wouldn't help.
S-Corp might be different...
I am guessing that there will probably be much discussion and debate on this from others that like me, barely know what we are talking about. My wife does home loans for a major bank so when she gets home later tonight I'll have her clear up any lingering questions.


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## Jimmy Bernat

I should just meet with my old cpa. Before doing Uber I owned a couple of restaurants and a bar


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## LAuberX

I wanted to apply for a HELOC, the problem is they wanted 2 years of tax returns.... as Uber pays squat, I stopped right there.

you need an INCOME to get a loan... a GOOD income! lol


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## Jimmy Bernat

LAuberX said:


> I wanted to apply for a HELOC, the problem is they wanted 2 years of tax returns.... as Uber pays squat, I stopped right there.
> 
> you need an INCOME to get a loan... a GOOD income! lol


Yeah I've made almost $35k doing Uber lyft for 6 months. Not amazing money but pretty for having this flexible of a schedule


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## IERide

"Made"? Net or gross?


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## Papa Sarducci

The only advantage I could see is if you register the vehicle to the business, buy insurance through the business, bought gas and paid for repairs through the business, then it may help. Still as mentioned previously as a single person LLC you are viewed as a sole proprietor. Now if you make your wife a partner in the LLC then you have a corporation. Single person LLC is a waste of time and money, just stay a sole proprietor.


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## Jimmy Bernat

IERide said:


> "Made"? Net or gross?


That's the amount after uber lyft fees and after gasoline but before other expenses. So it's probably closer to $30k
I should note that I drive Uber select and lyft and qualify for a 20%pdb from either lyft or uber every week. So I'm not paying much commission probably around 5%


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## Jimmy Bernat

Papa Sarducci said:


> The only advantage I could see is if you register the vehicle to the business, buy insurance through the business, bought gas and paid for repairs through the business, then it may help. Still as mentioned previously as a single person LLC you are viewed as a sole proprietor. Now if you make your wife a partner in the LLC then you have a corporation. Single person LLC is a waste of time and money, just stay a sole proprietor.


Yeah I'm just gonna make an appointment with my old cpa with my wife and figure out the best option. I'm not wanting to go back to my career for at least another year or two. I'd like to ride the uber train till the wheels fall off which I'm sure isnt that far away


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## Louisvilleuberguy

Unless you are making a decent profit it is not going to effect your income tax return that much if any. If you do create an llc and pay yourself put of it to avoid paying self employment tax on the remainder of the profit you will need to be sure you choose to be taxed as a Scorp because just creating a llc as an individual and paying yourself will make no difference. The default when you create an llc is being taxed as an individual or there are 2 or more of you then a partnership.


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## Ubercology

IERide said:


> I have an LLC (created it for something else, but still use that bank account for Uber income) - all of my Uber and other income goes into that account


So in the tax page you add the tax ID of the LLC?


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## Louisvilleuberguy

Let me ask you a question is the other business anywhere close to transportation or like Uber because you could be setting yourself up for trouble combining everything. 

I'm not sure where you looking to add the tax id if your speaking about Uber page I guess yes you would put the ein number on the tax page if your wanting the 1099misc come in the business name. 

But I caution you on making sure what your doing is correct I have been doing business taxes for years and have seen so many get themselves in trouble not by being dishonest but by using there own common sense to figure out how to set up a business and usually it does not fall into what the irs guidelines require. 

In the end I don't think it will effect your tax or your income setting it up the right way. If you want to talk I would be happy to speak with you and give you any free advice you need. 

I just don't want anyone hurting themselves trying to do the right thing but because the irs is the way they are end up hurting themselves I know nothing about your other business so I cannot tell you if your right or wrong I can just caution.


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## Louisvilleuberguy

You can choose to be taxed as an individual when setting up an llc and then still use your social and not mess with getting a ein number. It would require you to do a separate schedule C for your Uber business and in the future if the business grows you can always elect a different way of bring taxed like a S Corp so your not stuck with your initial choice this is why the llc has become so popular along with the s Corp was never designed to be for your typical small business. It was designed for doctors and attorneys if I remember correctly.


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## Ubercology

Louisvilleuberguy said:


> You can choose to be taxed as an individual when setting up an llc and then still use your social and not mess with getting a ein number. It would require you to do a separate schedule C for your Uber business and in the future if the business grows you can always elect a different way of bring taxed like a S Corp so your not stuck with your initial choice this is why the llc has become so popular along with the s Corp was never designed to be for your typical small business. It was designed for doctors and attorneys if I remember correctly.


I was asking about the Uber part. I know that when I setup the tax page Uber asked for name and SSN. An LLC does not have an SSN if I choose to use an EIN. So when I enter info into Uber, do I use my company name and EIN or my name and compnay EIN. I just want to make sure I setup corectly as an LLC.


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## SEAL Team 5

Ubercology said:


> I was asking about the Uber part. I know that when I setup the tax page Uber asked for name and SSN. An LLC does not have an SSN if I choose to use an EIN. So when I enter info into Uber, do I use my company name and EIN or my name and compnay EIN. I just want to make sure I setup corectly as an LLC.


You use the employment identification number to what the IRS assigned it to. Which I'm guessing is your LLC.


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## Rjds

What if I started the year as sole proprietor and four months later changed it to my LLC to protect my assets. I have not paid any State General Excise Tax as of yet (accountant, but not tax person said as long as I pay GET and Federal taxes by January 15th I should be fine)? Should I create a separate LLC just for Uber/Lyft?


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## UberTaxPro

LLC's are governed by the individual states. The laws vary state to state. As far as taxes are concerned, there isn't any advantage for an Uber/Lyft driver to form an LLC unless your net income from the Uber/Lyft activities is greater than $50,000. As far as "protecting your assets" through an LLC, you'll need to speak with an attorney from the state your considering forming the LLC in.


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## UberTaxPro

Papa Sarducci said:


> The only advantage I could see is if you register the vehicle to the business, buy insurance through the business, bought gas and paid for repairs through the business, then it may help. Still as mentioned previously as a single person LLC you are viewed as a sole proprietor. Now if you make your wife a partner in the LLC then you have a corporation. Single person LLC is a waste of time and money, just stay a sole proprietor.


If his wife becomes an LLC member with him the default tax entity is partnership not corporation in non community property states(all but nine states). A single person LLC defaults to sole proprietor like you said however, any LLC can elect to be taxed as a C corp or S corp with the IRS. For tax purposes, forming an LLC generally does not make sense unless net income is upwards of $50,000 or so.


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## Mars Troll Number 4

UberTaxPro said:


> If his wife becomes an LLC member with him the default tax entity is partnership not corporation in non community property states(all but nine states). A single person LLC defaults to sole proprietor like you said however, any LLC can elect to be taxed as a C corp or S corp with the IRS. For tax purposes, forming an LLC generally does not make sense unless net income is upwards of $50,000 or so.


Also, virtually anything your liable for would be covered by insurance.


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