LLC 3 Letters That Can Make a Difference in Your Farm Taxes

How can adding three letters to your farm name change your tax liability?  Bonnie Collins with Cornell Cooperative Extension says forming an LLC can not only change your tax liability but also protect your assets.

Don't be confused, an LLC is a Limited Liability Company, not a corporation.  By forming an LLC, it takes the burden of taxes off the farm itself and places it on the members or partners who are part of the company.  In other words, profits or losses are reported to the IRS on personal tax returns.

Forming the company can also make it easier when transferring assets to your children or other heirs and limits their tax liability.  In the event of a lawsuit, it also protects your personal assets that aren't part of the company.

It's easy to form an LLC, you can do it online and without legal assistance at How To Start an LLC.com.  There's no annual meetings or minutes to records.  You do have to file a report twice a year with the NY Secretary of State.

While your not required to have an attorney to start the LLC, it may be a good idea to talk to a tax or legal professional.  Learn more about the advantage of forming a company at these websites;  Farm CPA Today, Internal Revenue Service or Department of State.  You can also contact, CCE's Bonnie Collins at 315/736-3394 ext. 104 or email:  bsc33@cornell.edu

SOURCE:  Cornell Cooperative Extension