Question
Ziggy continues to earn only about $30,000 a year in royalties, etc. from licensing his father's image, music, etc. He asks you for tax advice
Ziggy continues to earn only about $30,000 a year in royalties, etc. from licensing his father's image, music, etc. He asks you for tax advice regarding incorporating or not for the annual receipt of the $30,000.
a. | You recommend an LLC because theyre the hot ticket. He can enjoy limited liability and tax rates at the individual rate. Employment taxes and a possible passive tax are no problem. | |
b. | You recommend a C corporation in order to lock up income in the corporation at lower tax brackets. Double tax is no problem. | |
c. | You recommend that he just continue receiving royalties and report them on Form 1040. He may purchase insurance if he is worried about lawsuits. | |
d. | None of these is good advice. |
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