Friday, November 30, 2012


Why LLC?
LLC has gain its increased popularity in the past years based on professionals’ advices. But it has been a challenging task to explain to foreign investors about tax benefit LLC entails. 
From income tax perspective, an LLC is not a separate tax-paying entity in the eyes of IRS. Profits, losses, deductions and credits are allocated to each member who is separately and individually liable for his share. This scheme is called tax passing through. The benefit of it is that the company’s income is not taxed before it is allocated to members, unlike in corporation.
从收入税的角度来说,LLC在IRS的眼里不是一个纳税体。 所有的盈利、损失、减免等等都是分到个体拥有着。 这个计划叫做Pass-through. 这样的好处是公司的收入在公司拥有者的手中时没有上过税, 而一般公司就有。   
In direct contrast, income and profits are taxed at the corporate level when earned, then taxed again when distributed to the various shareholders as dividends. 
S corporations are taxed in a somewhat similar fashion as are LLCs. The tax burden on retained earning in an S corporation passes through to the individual shareholders. Good news is that there is more to it, that it, the income can be re-characterized. For example, if the S corporation earns profits that would be taxed as ordinary income if earned by an individual, the S corporation can pay the earnings as a “distribution to shareholders.” When one received payment in this fashion, they can avoid Social Security and Medicare tax, currently a 15.3% tax savings. 
S-Corporation和LLC 就很相似。 S-Corporation还更好, 因为有的收入可以做为给拥有者的分配, 有的呢可以做为工资。 这样可以避免缴纳Social Security and Medicare 税。 这样还能省15.3%的税呢。 
Unfortunately, all owners must be US citizens if a LLC desires to be taxed as S-corporation. Foreign investors have no better choice than LLC if they want to best protection and least hassle. 
不幸的是, 只有美国公民才能申请以S-Corporation的方式缴税。 LLC对于外国人从个人资产的保护到最少的麻烦方面,是最好的选择。