My unmarried partner and I formed a LLC to launch a now defunct startup business. Neither of us are currently employed, and she intends to stay home with our daughter for the remainder of the year.
I am about to accept a contract position and am wondering if it is allowable to pay our LLC then distribute my wages to myself and my partner to lower our federal withholding. Rather than a 1099 in my name for $100,000, we would each receive $50,000 through the LLC, lowering our tax rate.
She would be performing only light administrative duties. Does this fly with the IRS?
Thanks!
I am about to accept a contract position and am wondering if it is allowable to pay our LLC then distribute my wages to myself and my partner to lower our federal withholding. Rather than a 1099 in my name for $100,000, we would each receive $50,000 through the LLC, lowering our tax rate.
She would be performing only light administrative duties. Does this fly with the IRS?
Thanks!