Accounting and Your LLC

One benefit an LLC has over other business entities including corporations is that it is not bound to the “accrual” accounting method. Rather, it can use the “cash method,” meaning that your income is not earned until you actually receive it.

Can I Start Making Claims for Business Expenses?

Regardless if you’re a sole proprietor, LLC or corporation owner, you can claim business expenses. For instance, if you purchased a new $1,500 computer through your LLC that is needed to perform functions for the business, it can be claimed as a business expense, which will deduct that expense from your company’s gross income. This is a practice that should be done with extreme caution, as it poses a risk of being audited by the IRS.

If I Start an LLC, Will I Have to Hire An Accountant?

In short – no. This is a common misconception, as it is entirely possible to handle your own accounting at home, without having to hire a professional. Thanks to amazing accounting software packages like TurboTax and H&R Block TaxCut, handling your LLC’s taxes are a cinch, at a very minimal cost! Both of these software packages are designed for non-accountants, and take you through an elementary-style step by step process in doing both your personal and business taxes.

Where to Go Next: LLC Taxation | LLC Banking | LLC Registration