How we use our LLC to save money in 2025

Switching to an LLC

In 2023, we switched to a Limited Liability Company (LLC) for the blog. Before, we were operating as a sole proprietorship. We had two main reasons for switching:

1. We wanted to separate our assets from the blog assets and have a clear separation of liability.
2. We wanted to keep some money into the company, to save on taxes.

The reason number one was much more important for us than the second reason. Indeed, optimization was not the priority, but it was a good benefit.

I will not go into the details of LLC in this article. If you are interested, I have an article about creating an LLC.

In this article, I want to go over how people with an LLC can use it to optimize their finances. The goal is not that everybody creates an LLC. The goal of this article is to be transparent about how we use our LLC. Hopefully, with that, you will have a better idea of how people with a company have an advantage.

Finally, I want to insist that you do not abuse any of these tips. Some people use their companies in illegal ways to save money. It is not my intention to suggest any of you do that! On the contrary, I would strongly recommend you refrain from any abuse.

Keeping some money in the company

The first thing we do differently with an LLC is to keep some income into the company. This is very different from what we were doing with the sole proprietorship.

What is the difference? This makes a huge difference in our taxable income. Before, all the income from the blog was added to our personal income. Now, my wife gets a fixed salary from the blog. This salary is added to our taxable income. But the rest of the profits stay within the company. The difference is that the profits from a company are taxed much lower than the income of a person. As a result, we save on taxes.

Currently, we extract about a third of the income of the blog, and we want to reduce it in the future.

One question you may ask is what we are going to do with the money left in the blog. This is an excellent question because we cannot use this money for personal expenses. Since my plan is to retire early, we can later raise the salary from the blog once I have no salary from regular employment. So, we are basically delaying income to a future when we will have lower tax rates.

And another good question is: What are we doing with the cash? We are planning to invest that cash, following our usual portfolio. We have waited (procrastinated) too long, but after a year, we will soon start to invest. With that, we are not keeping too much cash and we will reduce our opportunity cost. In the future, this could also allow us to take a margin loan, if necessary.

Deducting some expenses from taxes

In our personal situation, there are not many things we can deduct from our personal taxes. However, in a business, all expenses can be deducted from the taxable income since we are taxed on our profits. Therefore, it makes sense to pay some things from the company expenses instead of paying them from our personal expenses.

Of course, and I want to emphasize this, this should only be done for expenses that are related to the business. If you start to expense everything to your business, you will be in trouble.

In our case, since the business is entirely done on a computer, we are expensing computer and laptop expenses. We are also expensing some office expenses like paper for the printer or pens (yes, we still use pens!). And our internet bill is now paid by the company as well. I also expense the coffee beans we use.

On the other hand, we do not pass all our meals as business expenses because that would be unrelated. But if I do a lunch with someone related to the blog, I will expense it. And we do a business meal once a year with my wife (we are the only two working on the blog). Other than these, I would rather not use the company for any other expenses.

Buying a car with the company

The last thing we are doing with the company is that we bought our car with the company instead of buying it ourselves. This is similar to the previous section, but also slightly different.

The main point is that car-related expenses are deductible from the company taxable income. And this is also valid for leasing. This is different from personal taxes where leasing cannot be deducted while car loan payments can be deducted. So, we can deduct the leasing, as well as the insurance, the fuel and all the maintenance.

There is one important difference with this expense. Since the company has a car and its employees can use them, this gives the employee an advantage. So, the income of these employees must be increased. This is not a real salary, but this will add up to the taxable income of the employees. And social deductions must be paid on this part of the salary. Therefore, the salary the company is paying to my wife has increased since we bought the car with the company. And there are laws on how much should be added to the salary for that.

Some people may argue that as an internet business, we do not need a car. It is not entirely true because I often meet people in other cities. Recently, I went to Bern and Zurich in the company’s car. And I frequently go to Fribourg for that as well.

Conclusion

I hesitated writing this article because it can cause some controversies about how people use LLCs (and other companies) to optimize their finances. But I felt I owed it to my readers to be more transparent.

Overall, we can move several of our expenses to the blog. As such, these expenses are deducted from the taxes of our LLC. Compared to what we were doing before, we are also keeping some cash in the company, so our salary is lower than the profits of the company. The goal is to delay that income to a point where our taxes are lower.

As such, we have an advantage over people without a company, since most people cannot deduct these expenses. And it also means our expenses (shared in our monthly updates) are lower than what they are. For instance, we used to pay internet ourselves, now we have a business internet plan, paid by the blog.

What do you think about this? If you have a company, how are you using it?

Recommended reading

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• How to create an LLC in Switzerland