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FEIE and being incorporated.Advice on what to do with all the money you made on your last contract besides investing in Pork Bellys and oranges. Also discuss Taxes, Investments, IRAs, Starting Your Own Company and Financial Q&A
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ReconValhalla
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Joined: Jun 12, 2007
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 Posted: Thu Apr 08, 2010 5:22 pm
Post subject: FEIE and being incorporated. |
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I already understand the basics of the Foreign Earned Income Exclusion, but am interested in how it goes hand in hand with owning an LLC and being an independent contractor.
Anyone that has experience with this is welcome to chime in!
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Hávamál 38: "Let a man never stir on his road a step without his weapons of war; for unsure is the knowing when need shall arise of a spear on the way without."
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OldSoldier71
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Joined: Aug 11, 2006
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Location: New Jersey, Iraq, Africa, Mexico, Kuwait, Afghanistan, Walt Disney World.
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Posted: Thu Apr 08, 2010 8:29 pm
Post subject: Re: FEIE and being incorporated. |
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Dude...call my accountant.
_________________
To really live, you have to nearly die.
The unwanted, doing the impossible, with next to nothing, for the ungrateful. -Afghanistan 2009-2011
RIP Carey Robinson, KIA 28AUG2006, Iraq.
He died for me and I killed 'em back for him.
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ReconValhalla
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Posted: Fri Apr 09, 2010 11:24 am
Post subject: Re: FEIE and being incorporated. |
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lol who's your accountant?
_________________
SDMF DBAP
Hávamál 38: "Let a man never stir on his road a step without his weapons of war; for unsure is the knowing when need shall arise of a spear on the way without."
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bedpan_commando
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Joined: Nov 25, 2008
Posts: 43
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Posted: Fri Apr 09, 2010 1:50 pm
Post subject: Re: FEIE and being incorporated. |
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While I'm not a lawyer and this is not legal, tax, medical or other advice, the general rules of thumb are this:
The entity that has to worry about it is the one listed in the CONTRACT.
90% of all law is CONTRACT LAW.
If the independent contractor is eligible for the FEIE, then that money is not taxable. THe LLC still has to pay taxes on the rest of it since the LLC did not 'go' anywhere. A good accountant will find training, equipment, and other costs as well as other goodies to spend the money on to ensure the LLC does not generate a substantial profit. Failure to generate ANY profit after 5 years will likely result in an audit. Pay the piper and that $56 bucks in taxes will help you sleep at night.
THe LLC is a separate 'person'. IN order for it to 'go' anywhere, it has to register in the new jurisdiction (e.g. IRAQ) as a resident foreign corporation and you need a lawyer who specializes in this sort of thing at this point. Probably not worth it if you gross under $1M USD/yr.
If the LLC owns vehicles, equipment, etc. which can be depreciated, make sure the accountant knows about it.
Any reputable CPA can work the LLC angle. If you meet the physical presence test, you should get the deduction on your income as an employee or contractor for your LLC. The LLC gets the opportunity to warp the tax code to it's favor. The accountant gets paid. The IRS gets to pretend it is omnipotent. Everyone goes home happy.
Thus endeth the sermon. This has been a religious experience, exempt from government monitoring under the US Constitution and it's amendments and not tax, legal, medical or other advice nor counsel. I recommend you find a qualified adviser if such people exist.
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OldSoldier71
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Posted: Fri Apr 09, 2010 5:47 pm
Post subject: Re: FEIE and being incorporated. |
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_________________
To really live, you have to nearly die.
The unwanted, doing the impossible, with next to nothing, for the ungrateful. -Afghanistan 2009-2011
RIP Carey Robinson, KIA 28AUG2006, Iraq.
He died for me and I killed 'em back for him.
Site Manager, Camp Phoenix
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ReconValhalla
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Posts: 1320
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Posted: Fri Apr 09, 2010 9:16 pm
Post subject: Re: FEIE and being incorporated. |
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Thanks OS and bedpan!
_________________
SDMF DBAP
Hávamál 38: "Let a man never stir on his road a step without his weapons of war; for unsure is the knowing when need shall arise of a spear on the way without."
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OldSoldier71
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Joined: Aug 11, 2006
Posts: 894
Location: New Jersey, Iraq, Africa, Mexico, Kuwait, Afghanistan, Walt Disney World.
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Posted: Fri Apr 09, 2010 10:11 pm
Post subject: Re: FEIE and being incorporated. |
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Da nada.
_________________
To really live, you have to nearly die.
The unwanted, doing the impossible, with next to nothing, for the ungrateful. -Afghanistan 2009-2011
RIP Carey Robinson, KIA 28AUG2006, Iraq.
He died for me and I killed 'em back for him.
Site Manager, Camp Phoenix
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