What does SMLLC and Cryptocurrency mean?
Here at Camuso CPA PLLC, we provide consultation and services for better understanding and ease doing business. For those of you who are unfamiliar with the term, SMLLC or Single Member LLC is simply the business entity term with a limited company with only one owner. While Cryptocurrency is by far one of the newest terms storming the business market that refers to the digital money from a decentralized technology to make secure payments. Having correct information on these terms allow investors to create his own strategies to succeed.
Your choice of entity and tax treatment for your business is one of the first decisions that you will make regarding your company and it should be with prudence. The key to having the right choice is having the right information. By having correct information on the tax implications may affect your choice of entity and tax treatment suited for business. Choosing your tax treatment is electing a business entity for your operations (sole proprietorship, partnership, S corporation and C corporation).
How It Works
If you are operating a business as Crypto currency miner/investor you are subject to two separate tax exposures. First is tax at the fair market value of the virtual currency on the day that it is mined into gross income. Second is Capital gains which are due on the sale of bitcoins viewed as capital asset. Learning these tax implications may allow cryptocurrency investor to decide what is favorable for them in a long-term basis.
What You Can Do
You must determine the right entity structure for your business and compare your options. If you are looking for liability protection then SMLLC can be less costly. It Protects personal assets from liabilities associated with the business conducted by LLC. It is also treated as disregarded entity for federal income tax and its profit or loss will be reported on an individual member’s schedule C as if it were a sole proprietorship. Thus, will save the member time and money for tax preparation of returns since separate LLC isn’t required to file additional tax returns.
SMLLC is also beneficial for cryptocurrency investors operating business that are just beginning or recently established as the business grows the SMLLC can be converted to an S-Corporation if income reached level to justify the cost and able to meet other requirements. This is valuable to cryptocurrency miner/investor converting to an S-Corp structure realizing they can have tax savings on employment taxes tagged as both corporate employee and shareholder.Single-Member LLC offers significant benefits to their owners as the name implies it is a limited liability company with only one owner; whether such entity is beneficial for your business depends on the details of your own personal situation.
Here at Camuso CPA PLLC, we do have the ability to help you . If you are interested into how this service might benefit your business, please don’t hesitate to give our cryptocurrency accountants a call today. One of our friendly and knowledgeable representatives will be happy to answer any questions you have.