What You Should Know About Kentucky LLC Taxes
Although there are many benefits associated with having a Kentucky LLC, you have to remember to pay your taxes. In the state of Kentucky, like most other states, LLCs are separate entities that may require you to pay taxes even if you don’t make sales. Each state is appealing based upon the tax laws associated with limited liability companies. That is why people that are in different states will often obtain LLCs in states that are much more lenient. One of the worst in California, but the state of Kentucky is actually not that by comparison to other states where the taxes are actually quite high.
How Are Taxes Assessed For Kentucky LLCs?
If you are LLC makes less than $3 million a year, the most you have to pay is $175. This is actually very good by comparison to many others. It cost several hundred dollars in the state of California to have your LLC, which is why many people in that state have limited liability companies set up in different ones. In regard to who pays the taxes, if there is only one member of the LLC, they are responsible for those taxes. On the other hand, if there are multiple people, only one person is designated for being responsible for the taxes.
Is This A Good Or A Bad Thing?
On one hand, by paying $175 a year for your LLC, and receiving all of the protection that it can provide, it’s actually a very good deal. If you are ever sued by someone that is not happy with the products or services that you are selling, they cannot come after your personal assets. On the other hand, there are other states where they do not charge taxes at all, and if they do, it’s very minimal. Therefore, if you are in the state of Kentucky, and that is where you are doing your primary business transactions, that is likely where you must form your LLC.
Is There A Way To Avoid Paying These Taxes?
There is no scenario where you can avoid paying these taxes. The only possibility is to go through what is called the dissolution of the LLC itself. You will literally terminate the LLC, right out of existence, and therefore you will not be responsible for taxes anymore. Of course, if you did not pay your taxes, you will still be responsible for those plus any late fees that can accrue. That’s why many people will abruptly before they will be billed for these taxes again, terminate their LLC if it is not something that they are in need of any longer.
Can Somebody Manage Your LLC For You?
One of the best ways to ensure that all of your documentation is in order and that you are paying your taxes promptly is to work with a company that can handle all of these issues for you. In most cases, businesses that you work with are not really responsible for helping you with reminders regarding your taxes. They may tell you that you have to pay them, but then from that point forward, that will be up to you to remember. However, setting up your LLC can be handled completely, from start to finish, by reliable companies that will help people in Kentucky set up LLCs. It is during this time that you can ask them about taxes if you want to and receive the most up-to-date information.
Can They Also Help You With The Dissolution Of Your LLC?
These businesses are not only capable of setting up your LLC, or any other business entity, but they can certainly help you go through the dissolution process. They will do all of the paperwork for you, ensuring that it is handled, usually within a few days, so you’re not responsible for paying your taxes anymore. Once this is done, you will no longer have to worry about accruing taxes for a business that you are no longer doing. Unfortunately, many people forget about doing this which can lead to owing even more money. That’s why it’s important to work with a business that is an expert with the formation and disillusionment of these LLCs so that you do not have to go through the trouble.
Now that you know a little bit more about taxes and LLCs, you can decide whether or not this would be a good fit for you. In general, most people should start with a sole proprietorship, or even a partnership, until they start making a little bit of money. If you are becoming more successful, you will certainly want to consider setting up an LLC just for the sake of protecting the assets you are making. All of this can be handled by reputable businesses that work with those in Kentucky that would like to have a limited liability company.