(Binary News Network) Providers of innovative tax tools, BeforeTax.co, announces the launch of their new LLC tax calculator designed to make it easy for small business owners to calculate LLC tax.
BeforeTax.co has stayed true to their goal of empowering entrepreneurs with tax insights to expand their financial freedom as the company recently launched a user-friendly LLC Tax Calculator. The newly introduced tax solution comes as a double-edged sword. It enables taxpayers to understand their tax liability while also helping to estimate their savings, especially as the Biden administration plans to expand self-employment taxes.
Tax payment and management remain a significant challenge for businesses across the United States and other parts of the world. It can be even more interesting for small business owners and self-employed individuals that do not have the budget to hire tax consultants.
Consequently, they often fall on the wrong side of the law and ultimately suffer tax authorities’ penalties. With the relative complexity of the tax system, it can be cumbersome for individuals to ascertain their tax liability, which is where BeforeTax.co is looking to be of immense help with the LLC tax calculator.
The LLC tax calculator has been described by many as the best tool to help entrepreneurs calculate LLC tax due to its fantastic features. The tool helps small business owners estimate their tax rate, including how much they pay for self-employment compared with income taxes for both state and federal.
How This LLC Tax Calculator Works?
The tool calculates LLC tax estimation based on self-employment tax and income liability. The first one includes SSN (Social Security Number) and Medicare, which gives approximately 15% of the total tax. One important note here is that the business income is called “earned income,” and even though it passes through personal tax, it is subjected to a higher tax rate.
BeforeTax.co tool use AGI (Adjusted Gross Income) as a starting point to calculate State and Federal Income tax. This calculator applies standard deduction ($12,400 for 2020 single filers) and Section 199A (QBI/ Qualified Business Income Deduction) in alignment with the IRS rule that allows many deductions. As a thumb role suggested by many financial advisors, an LLC should allocate 30% for their tax, but it also depends on the state.
BeforeTax.co guidance offers a comprehensive overview of the list of states that are considered the best and the worst on the LLC tax.
Alaska, Florida, Nevada, and Wyoming are known for zero income-tax states with just $50 business tax paid annually for Wyoming. On the contrary of these generous states, Oregon, Hawaii, Alabama, and California are among the worst states for LLC business with income tax 5 – 9.9%, 1.4 – 11%, 2 – 5%, and 1 – 13.3% (with business tax $800 minimum), respectively.
Little did people know that Delaware which is well known for low LLC tax, doesn’t seem to be the most favorable state based on the table. This state charge 2.2 – 6.6% and $300 for income and business tax, respectively.
The tool also estimates the savings of users by making the LLC an S Corp. The savings calculations section of the tool helps users ascertain their savings based on business classification. The comprehensiveness of the LLC tax calculator from BeforeTax.co and the user-friendliness of the tool have endeared it to business owners across the nation, with accolades coming from different quarters.
“This is by far the best LLC tax calculator I have come across. It is virtually impossible to find straight forward information on how much you have to pay in business taxes every year. It took me 5 minutes to find my rate and even better, the app put me in contact with a CPA to turn into an S-Corp and save even more money,” said Jorge Alejandro Diez.
For more information about the latest LLC tax calculator update and to prepare for the imminent self-employment tax expansion, please visit – https://beforetax.co/llc-tax-calculator/. Currently the LLC tax calculator fit with 2019 – 2020 standard.
BeforeTax was founded by Matt Jensen, a small business owner, to help entrepreneurs and business owners manage their tax liability effectively. The company creates tax research and tools for small business owners, empowering them with tax insights to expand their financial freedom and control their financial future.