LLC Myths: The Truth About LLCs and Taxes
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In this episode of the Sunlight Podcast, I’m unpacking some of the biggest myths I hear about forming an LLC. If you're self-employed or thinking about business formation, it's so important to understand what an LLC really is—and what it isn't. I talk through common misconceptions about taxes, liability protection, whether an LLC makes you a “real” legal entity, and how much ongoing accounting or paperwork is actually needed.
I also share why business insurance is still essential (yes, even if you have an LLC), and how good financial advice can help you make smart choices for your business. Plus, I give a sneak peek at my upcoming book, Taxes for Humans, where I go even deeper into LLCs, business structures, and all the stuff no one teaches you when you become self-employed.
00:00 Introduction to LLC Myths
04:43 Myth 1: LLCs Change Your Taxes
08:28 Myth 2: LLCs Make Your Business Official
10:25 Myth 3: LLCs Are the Only Protection
13:12 Myth 4: LLCs Are Set It and Forget It
17:19 Final Thoughts and My Book, Taxes for Humans
Takeaways
LLCs do not change your taxes; they are a legal entity.
Your business is official when you have a profit motive, not an LLC.
LLCs provide liability protection but are not the only option.
Business liability insurance can also protect your business.
Maintaining an LLC requires annual fees and updates.
Accounting practices are essential to uphold LLC protections.
Don't rely on friends' advice about LLCs; understand your own needs.
Pre-orders for books are crucial for their success.
An LLC is a flexible entity that allows various tax options.
Separate business and personal accounts are mandatory for LLCs.
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Links:
Link to pre-order my book, Taxes for Humans: Simplify Your Taxes and Change the World When You’re Self-Employed.
My On-demand class: Make Taxes Easier and Stash an Extra $152k in Your Savings