What You Need To Know About Virginia LLC Taxes
If you own and operate a business in Virginia, and you have an LLC, you may be concerned about the type of taxes that you will have to pay. You may also not be aware of the forms that you must use, or the times during the year that you must submit these forms, in order to pay federal and state taxes. As with every other state, the business income that you produce is how taxes are assessed. This is true from so proprietorships all the way to S corporations. Virginia LLCs are not that different, as they are also businesses generating revenue, and it is based upon this revenue, minus expenses and deductions, that the amount of tax that you will be derived.
Does Virginia Collect LLC Taxes?
There are only a total of six states that do not have a corporate income tax. This includes Wyoming, Washington, Texas, South Dakota, Ohio, and Nevada. Therefore, Virginia is a state where corporate income tax must be collected at some point in time. However, LLCs are pass-through entities, which means that the owner of the LLC, and even the members, will be responsible for paying taxes based upon their earnings. In Virginia, corporations are going to be taxed at 6%. An example of this would be a business earning $500,000 in net income, which would then of $30,000 at 6%. This information, and the forms that you must use, will be known by your accountant as they are preparing your taxes.
Do LLCs Have To Pay Taxes Independent From The Business Owner?
LLCs, as mentioned before, are pass-through entities. Therefore, the limited liability company itself is not required to file any type of taxes at all. It is the income from the business, that which is derived in the split between all of the members, from which state and federal taxes must be derived and paid. Additionally, if you do regard your LLC as a corporation, it would then be subject to the Virginia franchise tax. Based on this information, you can easily see how to pay your taxes. If you are the only member, remember to file the Schedule C form and attach this with your 1040 tax return.
What If You Do Not Have An LLC?
If you have not yet created a limited liability company, you can do so quite quickly as Virginia makes it very easy to do so. There are a few things that must be done prior to submitting your Articles of Organization, the document that is submitted in order to create your LLC. It is important to register the name of your limited liability company beforehand. You also need to find a registered agent to handle all of your legal mail from the state. Once you have those two things, as well as a physical place of business with which to associate your LLC, you will have all the information that you need to file this paperwork. This will be submitted on the Virginia New Entity Formation website. You also have the option of submitting this by mail. It will cost $100, but once you have paid this, and your limited liability company is active, you can take advantage of all of the benefits that it can provide.
The Operating Agreement For Your LLC
It should be stated that your Operating Agreement should also be created. This is the document that will reference all of the members and managers and their roles within the LLC itself. On one hand, it’s good reference material, showing you how you structured your limited liability company in the beginning. From a legal standpoint, it’s the document that you want to have access to if you are facing a civil suit. He clearly defines that your limited liability company is separate from you, and thus your personal assets, ensuring that they will not be affected when facing litigation. It takes just a few minutes to create this document, which will be an internal document, which you should save, and subsequently use, as these situations arise.
This overview of taxes as they relate to Virginia LLC should help you understand what needs to be done. You will know how to derive your taxes, pay them, and make changes based upon the number of members. Remember to file your Schedule C if you are the only member of your LLC, and this will be sent in with your 1040 tax return. Overall, forming a limited liability company is of great benefit to any business. Just make sure that you are working with your accountant in regard to taxes. Likewise, it’s a good idea to have another company form your LLC for you. There are many businesses that can assist you in this capacity. In no time at all, your limited liability company will be there to protect your business.