Small Business Tax Savings Podcast

The 10 LLC Mistakes That Can Destroy Your Business

11 snips
Jan 21, 2026
Forming an LLC is just the beginning; maintaining it is where many go wrong. Mixing personal and business finances can jeopardize your liability protection. Annual compliance tasks like filings and reports are often overlooked, leading to serious issues. Understanding when to elect S Corporation status can save you on taxes. Properly classifying owner compensation is crucial to avoid costly mistakes. Additionally, proactive tax planning and legal documentation can shield your LLC from future pitfalls. Don't let your business exist only on paper!
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ADVICE

Keep Finances Strictly Separate

  • Separate business and personal finances with distinct bank accounts and cards.
  • Take owner draws when needed and avoid mixing personal expenses into the business account.
ADVICE

Stay On Top Of Entity Compliance

  • Track and file required annual reports and state renewals on time to avoid administrative dissolution.
  • Put calendar alerts or sign up for state email reminders to ensure filings stay current.
ADVICE

Evaluate S-Corp When Profits Rise

  • Consider electing S corporation taxation once profits reach the threshold to reduce self-employment taxes.
  • Evaluate S corp around roughly $50,000 of profit to see if tax savings exceed added payroll complexity.
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