An Overview Of Alaska LLC Taxes And Other Information

If you are in the state of Alaska, you need to consider the amount of taxes that you will have to pay for your business. If it is derived from any type of state revenue at all, you are going to have to pay. There are certain rules that you must follow which focus upon the way in which you earn the income and how it is derived. Your tax depending upon the type of legal business that you form as well. That’s why many people will focus on getting an Alaska LLC in order to help with their taxes.

Why Form An LLC?

There are three specific reasons why any company, from large to small, should consider forming a limited liability company. The first thing you should know about these designations is that it allows you to operate your business, or multiple businesses, under the umbrella of this corporation. Therefore, if you have a business that deals with the public, and another that offers Digital Products online, they will be covered as long as they are filed in that manner. It is a good idea to consult with your accountant or someone that can set up your LLC, to make sure that this is done right. There are many people that will be unable to benefit from what their LLC can do for them if they do not understand the rules are what needs to be done. In regard to taxes, this is also true, as you will soon see.

 

Alaska LLC Taxes

Taxes That Pass Through Your LLC

The first thing you need to know is that when you’re doing business as an LLC you need to be able to funnel everything into a bank account of the same name. You can have multiple bank accounts, all covered by the same LLC, but this is the money that you are going to be taxed on. For example, if you are looking at corporate rates, these typically go up to 10%, but you can get them down to 4% in some situations. There are other situations where the range could be as low as zero, but it depends on the state you are in the type of products or services that you are offering.

The other States That Are Similar?

There are several other states that are very similar to Alaska. This would include Washington state, Texas, Ohio, South Dakota, and also Nevada. Another state is Wyoming. In these states, there is no corporate tax, but if you do have an LLC, there are taxes that you will have to pay. It generally comes down to ranges of income that are taxable. For example, let’s say that you make up to $25,000. This calculation will be based upon net income only. Therefore, you would only have to pay 0% in taxes because of the low amount that you were earning. From there, it goes up, first by 2%, and then by an individual percentage point as you make more money. For example, if your business is making over $100,000, you will be taxed on 5% of your income based upon this net amount.

What About Limited Liability Company Specifically?

If you are trying to save money on your taxes, and you do have an LLC, you should understand that these are similar to S corporations. These are entities, similar to LLCs, where you don’t have to pay any type of income tax to the state or even the federal government. The business itself distributes the money, to all of its members, and then the federal taxes are distributed to them. In Alaska, however, since there is no personal income tax, LLC members don’t have to pay it, specifically because they are earning it through the LLC.

Does This Make It Beneficial To Form An LLC In Alaska?

If you are in Alaska, based upon these computations, it is clear that forming an Alaska LLC would be a good thing to do. This is just one of the many benefits associated with having an LLC in Alaska. Keep in mind that LLCs are certainly classified based upon tax purposes. For instance, single-member LLCs will be a little different than partnerships. If you have classified your LLC as a corporation, then that would be a little bit different. Corporations would have to pay net income tax, so it would be better to have a smaller company with yourself as a partner instead. With all of this in mind, you can now decide whether or not to get an LLC based upon the size of your business or corporation.

Obtaining a Limited Liability Company in Alaska could be a very beneficial thing for you and your business. The ability to avoid income tax to some degree is there. However, it’s typically the protection that an LLC can provide for those that have a business that may be sued one day by an unhappy customer because of the products or services that you are offering.