In 2020, I worked as a sole proprietor and kept a 'business' account for my earnings. These were taxed twice - both as personal income and business income. Beginning 2021, I created an LLC (with me the only employee) mostly for the tax advantage and to provide legal protection for personal assets.
When I setup the bank account for my LLC, the bank asked if I wanted to transfer the monies from my previous sole proprietor business account. I should've said no, but said yes. To access these funds now, I believe they need to be considered distributions, and pay capital gains tax. Does it matter that 1) these funds were already taxed twice, and 2) were earned prior to becoming an LLC?
The amount is $80k, and I'd planned to use that for personal expenses. This was possible as a sole proprietor, but I fear that I can't touch that money unless it's for business expenses, or subject to that capital gains tax. Feel like I've already set myself up with a major fail right out of the gate.