LMFAO I think I know what he is trying to do. He is trying to bury his assets before the wedding. Nick and Ty talked about this on a stream before, about how if you are afraid you might have a messy divorce down the road you could bury your income in an llc or trust to avoid it getting taken in a divorce or civil suit. He is literally doing asset protection.
He's not hiding his assets in an LLC to protect them from a Vickers lawsuit, he is doing it to protect them from divorce.
The money he already has is separate and his so long as he doesn't co-mingle it. Basically just start a new checking account for them to share once they're married. I don't think having an LLC is really gonna protect future earnings from being split up with a divorce though if it can be showed that he is keeping the money there for that specific reason, which wouldn't be too difficult since he wouldn't really be using that money for business operations. Sure she won't be able to take LLC assets, but running the killstream and various other "independent media" ventures is pretty asset-light. I could be wrong here, but that's my layman's take. It isn't like there's much income to protect or go after, so maybe he thinks it wouldn't be worth pursuing. Of course, that sort of also makes it not worth protecting.
The LLC might offer an extra layer of protection for him from libel and whatnot if he published all his media through it. Sort of tough to sort through all that since he has owned it all as a sole-proprietor heretofore. Also, I imagine he could be held personally liable if the LLC didn't follow some kind of standards with vetting. Again, it would probably at least make it more expensive and burdensome to go after him.
Yup. If he's only just made an LLC it means that up to now everything he had was personal income. If he's got $50K from streaming back in the golden days of IBS he better hope he paid taxes on that.
The IRS also treats LLCs as pass-through entities for tax purposes. There's no change there really.
Now him writing off rent, utilities, gas, internet, and Makers Mark as business expenses is another matter of speculation entirely.
Food can be written off at 1/2 in many circumstances, but entertainment (drinks alone) cannot. He'd have a very very hard time justifying writing off food eaten at home as a business expense though. The LLC would probably make it a tad easier to write off expenses related to his "studio" and the trips he goes on just by nature of keeping things better organized, but he could do that before anyway since he was operating a sole-proprietorship. He'd be a moron if he wasn't already writing off his office space and pro-rated expenses related to it or alternatively $5/sqft up to 300 sqft simplified deduction.
I've posted about this earlier, but he really doesn't make enough for that to affect anything but his self-employment (presumably 7.65% of net income from the business) and maybe state taxes because he makes less than the standard deduction of $12,400.
On the LLC front, he could also be hoping the government will be renewing the PPP loans, like they have hinted they will. That would be an easy few grand that wouldn't have to be paid back, as long as it was used for payroll. Just a thought, I haven't seen explored yet.
You have to file your historical expenses and payroll info for those government loans. He wouldn't have any, so... He might get the $1-10k most companies got for just filling out the application though.
This to me, is why I find the tax system to be irritating. Can pay himself a small salary, small enough to keep benefits and ACA if you need it when he actually may have money for it. Can write off basically everything you do as business expenses - trips are for the show, lunch is a business lunch, clothes are the show wardrobe, booze is for the show, tech things, even video games they could say are for reviewing on the show. Basically everything but tampons and rent (which you might be able to claim as a studio expense) is for the show. If someone tries to get assets from the LLC, you just give everything out as salary. If they go after your salary, you just say all the money's tied up in the business.
The IRS recognizes all net income for a solely owned LLC as pass-through income. Anything like cloths would have to be used exclusively for the show. Food is only at 1/2 and only if it's actually business related. Trips can be for the show, they already could have been. Of course, the trip must be "mostly business" and an "ordinary and necessary expense" for the industry.
America allowing for deductions for small self owned businesses is a good thing. Don't like it? Maybe your own small business.
Finally, recall that this simply goes against the money you would have to pay taxes on. The IRS doesn't give you money for losses, and since Ralph makes nothing, this doesn't really substantially decrease his taxes (
less than 10% at the very high end of what he writes off).
But it definitely could be a way for him to get out of paying for healthcare for Faith.
As someone who was self-employed, he would already be able to write off medical & dental insurance premiums for himself, his spouse, and any dependents. As it stands right now, Faith makes and has nothing. She would surely be eligible for Medicaid. Both Ralph and Faith are low-income enough to receive either Medicaid or a fat Obamacare subsidy that would mean they paid less than $100/mo each for actually quite good insurance.
I addressed the income from the LLC earlier, but it's pass-through. I don't think he would be able to "hide" income in the LLC to maintain welfare unless he was buying a lot of assets for what should be a very asset-light business, and he makes so little he would probably qualify for a lot of welfare programs anyway.
