Q: If the father of a child has his own small business (LLC), does his monthly business expenses count toward his income?
Or does a certain percentage count? He pays himself very little and writes off everything thought the company such as car, insurance, phone, etc including our dinners when we used to go out. Is there a Florida law regarding this?
A: Your question is a little complicated but the short answer is yes, anything that reduces his normal living expenses counts as income, regardless of whether he writes it off as a business expense. Speak with a local family lawyer for more specific advice.
Terrence H Thorgaard agrees with this answer
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A: This is a good question to also ask your accountant. The answer may depend also on whether the LLC is taxed as an S-corporation. Generally, if the LLC is an S-corporation (many are), the owners will be taxed according to the salary that is paid and any distributions. The expenses of the company may be used to offset personal gains subject to the tax code requirements.
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A: This is a family law question and not a Florida question of tax law (as Florida doesn't have an income tax). Accordingly, I have agreed with Mr. Lieber.
A:
When running your LLC, you can deduct legitimate business expenses from your income. Expenses like business-related car use, insurance, and phone bills are typically allowable if they are necessary for your operations. However, personal expenses, such as dinners that aren't directly tied to business activities, should not be written off.
It's crucial to maintain a clear separation between personal and business finances. The IRS closely monitors deductions to ensure they are appropriate and related to the business. Misclassifying personal expenses as business expenses can lead to audits and penalties.
In Florida, there is no state income tax, but you must adhere to federal tax regulations. To ensure you’re handling deductions correctly and staying compliant with all laws, consider consulting with a tax professional who can provide personalized advice based on your specific situation.
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