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Old 09-28-2012, 06:24 AM   #21
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Originally Posted by Finance Dave View Post
Thanks! What about LLCs? I suppose that would be "unincorporated", so I'd not have to do this? I just opened a new LLC and will have "active income" under that LLC in the near future.
See below. So for SS/self-employment tax purposes a sole proprietor LLC would be reported by the owner on the owner's Schedule C subject to SE tax and a multiple owner LLC might pay salaries which would be subject to SS withholding and payment and/or make distributions reported on Schedule K-1 that would also be subject to self employment tax unless the recipient does not participate in the management and control of the partnership.

Reporting LLC Income, Losses and Expenses

Most owners of a one-owner LLC must fill out Form 1040 Schedule C. Business Income and Expenses. If the business is farming, then Form 1040 Schedule F, Farm Income, must be completed. If the business deals with real estate or rental properties, then Form 1040 Schedule E, Supplemental Income must be completed. The amounts from these forms are then transferred to the appropriate location on the owner's Form 1040.

Members of a multiple-owner LLC receive a Schedule K-1 from the LLC. The members must take the information that was supplied to them on Schedule K-1 and transfer it to Part II of Schedule E and to other forms as indicated on the Schedule K-1. These forms are then filed with the Form 1040.

A multiple-member LLC also must file a partnership information return, Form 1065, which shows how the money came in and was distributed to members, but no entity-level taxes are imposed. "Salary" to the owner of an LLC is really just a way of dividing profits, or an owner's withdrawal in a one-owner LLC.

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Old 09-28-2012, 02:39 PM   #22
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There's a very good chance you can draw 100k from your portfolio every year and not reduce the principal at all during the rest of your life. Congrats and well done.

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Old 10-02-2012, 08:36 AM   #23
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I love my dentist and drive 50 miles for cleaning because he and staff are so awesome. He is also a good friend...and it IS a stressful field. Dentists and physicians definitely pay into SS and after 35 years, you've paid in a great deal and are just a few short years away from collecting. Obgyn 65 is about to pay in his 40 quarters so he will be eligible. At your SS level, this should provide a significant chunk of the desired 100k. I would get on the SS website and check our your numbers. Also, is this 100k before or after taxes? If you are interested in leaving some monies to children, you might start converting some traditional IRA's to Roth category and you can also do any type of paid part time work and continue to fund a Roth if you are serious about leaving something for heirs. The bridge to medicare for you brings into the question of wife's age and ability to use Cobra if you can hold out until 18 months before 65. Good luck.

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