How To Start an LLC for an Amazon Business ๐งต
In this thread, I discuss how to set up an LLC, and LLC vs S Corp.
Find out how to SAVE $1,000's on taxes!
//THREAD//
In this thread, I discuss how to set up an LLC, and LLC vs S Corp.
Find out how to SAVE $1,000's on taxes!
//THREAD//
Usually, an S Corporation or an LLC will be selected for Amazon sellers.
However, an S Corporation could be a better option to save you taxes.
Things are also going to be a bit different depending on whether you are inside or outside of the USA.
However, an S Corporation could be a better option to save you taxes.
Things are also going to be a bit different depending on whether you are inside or outside of the USA.
You do not need to have a company or business set up on Amazon to sell.
Amazon will let you sign up with your personal bank details and ID info.
You can set up this way, and once you have enough (a couple hundred $) you can set up your business entity.
Amazon will let you sign up with your personal bank details and ID info.
You can set up this way, and once you have enough (a couple hundred $) you can set up your business entity.
The main reason that you will want to do this is to keep all of your income, expenses, and other related items, separate from your personal finances.
If you sell under your personal name, you will receive a statement of your Amazon earnings (like a W-2 form), and file that.
If you sell under your personal name, you will receive a statement of your Amazon earnings (like a W-2 form), and file that.
If you haven't already set up your seller account, you can file for an LLC now, or you can wait until you're actually selling.
To file an LLC, you need:
1. EIN number
2. Business Bank Account
3. Checking Account Debit/Credit Card
To file an LLC, you need:
1. EIN number
2. Business Bank Account
3. Checking Account Debit/Credit Card
If you sign up with an LLC, you are still considered an individual for tax status.
You will need the business account to be open for at least 60 days.
You will need the business account to be open for at least 60 days.
You want to make sure that your company name is different from your LLC name.
That way you can have multiple brands under the same LLC.
Make sure they are not the same.
That way you can have multiple brands under the same LLC.
Make sure they are not the same.
How much does it cost to start an LLC or an S Corp?
LLC -> $100 - $200
S Corp -> $100-$150+
If you're not located in the USA, you want to make sure that you have a registered agent to deal with letters and documents.
LLC -> $100 - $200
S Corp -> $100-$150+
If you're not located in the USA, you want to make sure that you have a registered agent to deal with letters and documents.
Another factor to consider is the state in which you file the LLC as some have HUGE tax advantages.
Setting an LLC up in Wyoming or Delaware is the way to go.
They have the cheapest tax rate and most favorable laws.
Setting an LLC up in Wyoming or Delaware is the way to go.
They have the cheapest tax rate and most favorable laws.
The Benefits of an LLC are:
-> Limited Liability
-> Pass-through taxation
-> Member-managed systems
-> No Ownership Restrictions
-> Versatile Tax Status
-> Limited Liability
-> Pass-through taxation
-> Member-managed systems
-> No Ownership Restrictions
-> Versatile Tax Status
The Cons of an LLC are:
-> Self-employment taxes (taxed 2x)
-> Records must be kept
-> Member termination kills an LLC
-> Self-employment taxes (taxed 2x)
-> Records must be kept
-> Member termination kills an LLC
Now let's cover the benefits of an S Corp:
-> No double taxation
-> Lower personal taxes for shareholders
-> Asset Protection
-> Easy transfer of ownership
Sounds great, but what does it mean in real life? Lets dive into an example.
-> No double taxation
-> Lower personal taxes for shareholders
-> Asset Protection
-> Easy transfer of ownership
Sounds great, but what does it mean in real life? Lets dive into an example.
LLC:
1. Salary -> Payroll & Employment taxes
2. Profits -> State and Fed Income tax
You are taxed twice, once on your salary, and again on your earnings.
1. Salary -> Payroll & Employment taxes
2. Profits -> State and Fed Income tax
You are taxed twice, once on your salary, and again on your earnings.
S Corp:
1. Salary -> Required to pay yourself a fair salary (based on exp and tenure)
2. Dividends -> Paid to Shareholders
You are only taxed on your salary and not your dividends.
1. Salary -> Required to pay yourself a fair salary (based on exp and tenure)
2. Dividends -> Paid to Shareholders
You are only taxed on your salary and not your dividends.
So, guys, that's how to structure your LLC/S Corp for selling on Amazon.
As always, consult a tax professional before making any moves!
As always, consult a tax professional before making any moves!
Want to create your own Amazon FBA Private Label business? Want to escape the 9-5 and spend more time with your family?
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We run a 12-month 1-1 mentorship program where we handhold you through 3 product launches.
Interested? Book a call with me here!
๐
calendly.com
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2. Follow @TheFBAInvestor for more
3. Subscribe to our YT channel
4. Have a great day :D
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I cover every single method of selling on Amazon.
Get it here.
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thefbainvestor.gumroad.com
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