USA Tax possibilities for new startup

[profnimrod]

I am a partner for technology smart grid startup setup up as an LLC partnership. At present each partner pays the taxes from the organization ourselves, and we file a K1 (I think it is) at the end of the year - I believe it's referred to as pass-through taxation.

Two things: is this the best way to do this for a company with annual revenues around $1M (for 2018), expecting to be $2-3M for 2019.

Also, I have not been paid for the past 7 years for the many hours that have gone into this startup. We have recently started taking a $2k draw per month, which obviously doesn't come close to paying for the previous years, but also the 200+ hours per month I (and my colleagues) do now. Is there a better arrangement which will minimize my tax exposure?

I should say that I have no problem with paying taxes. What irks me somewhat at the moment, is that we're paying the pass-through taxes, but not being paid (other than the recently started- 3 months ago - $2k per month draws). We're not in any rush to increase the draws to something more akin to a proper salary as we want to re-invest as much as possible into the company while we're in this very early phase and starting to grow.

Happy to do my own research, if someone can nudge me in the right direction.

Many thanks in advance for any guidance.

Kurt

 

[kirby]

If you guys are going to pull down $3M next year, you can afford to (and really need to) get tax advice from a qualified tax person and not off the web. They can also check to see if you are taking all the deductions you can.