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Advice on starting an LLC in LA
Posted on 9/30/13 at 12:26 pm
Posted on 9/30/13 at 12:26 pm
Looking for advice on setting up an LLC. Situation is that in a new position I would be a self employed contract employee. Looking to start an LLC to have the company pay the LLC and I withdraw from the LLC. How do I go about this and is this a smart idea? My thought is that with an LLC I would be able to benefit from business deductions such as continuing education and operating expenses.
9
Posted on 9/30/13 at 12:30 pm to theBeard
It usually works out for your benefit but every situation is different. I'd run this by your CPA, actually setting it up if simple
Posted on 9/30/13 at 12:37 pm to theBeard
Talk to your CPA.
You could probably set the LLC up by yourself.
You could probably set the LLC up by yourself.
This post was edited on 9/30/13 at 12:37 pm
Posted on 9/30/13 at 1:55 pm to theBeard
Just use forms provided by the SoS...in this instance it would be a disregarded entity for tax purposes...it isn't complicated...complications come in when you actually have a business with partners/investors.
Posted on 9/30/13 at 2:02 pm to theBeard
It's probably smart from a liability standpoint (if there's any liability that you might assume during "the course and scope" of employment). It's not really a tax savings like someone else said, but you can definitely get some additional write offs/deductions. I write of all office supplies purchases (ink, printers, computers, stamps, etc), "business dinners", etc through my LLC.
Posted on 9/30/13 at 2:39 pm to LSUGUMBO
quote:
It's probably smart from a liability standpoint (if there's any liability that you might assume during "the course and scope" of employment). It's not really a tax savings like someone else said, but you can definitely get some additional write offs/deductions. I write of all office supplies purchases (ink, printers, computers, stamps, etc), "business dinners", etc through my LLC.
I think you can save some on income taxes through wages/distributions, but OP should talk to a CPA about that.
As cwill said, the SOS forms are adequate for sole member LLC. They even have an online process that you can do in like 5 minutes. If you ever take on additional members it's time to get with a lawyer and look at writing a more fleshed out Operating Agreement and maybe amending the Articles.
Posted on 9/30/13 at 3:40 pm to theBeard
quote:You can claim deductions for these expenses as a sole proprietorship, or even as an employee. The primary purpose for forming a business entity to conduct a personal services enterprise is asset protection. It is possible to arrange things so you can avoid some self-employment tax, but there are trade-offs that must be made to do so. You should sit down with an attorney or CPA to discuss the costs and benefits involved.
My thought is that with an LLC I would be able to benefit from business deductions such as continuing education and operating expenses
Posted on 9/30/13 at 4:48 pm to theBeard
quote:
Looking to start an LLC to have the company pay the LLC and I withdraw from the LLC.
Posted on 9/30/13 at 8:00 pm to RushTigerLimbaugh
quote:
Looks normal to me.
Posted on 10/1/13 at 7:25 am to Poodlebrain
quote:
It is possible to arrange things so you can avoid some self-employment tax, but there are trade-offs that must be made to do so.
I have scheduled an appointment with our CPA to go over these items
Posted on 10/1/13 at 8:31 am to RushTigerLimbaugh
quote:
RushTigerLimbaugh
If you aren't going to help him why would you respond? Its useless to respond with
when you don't explain why.Posted on 10/1/13 at 12:54 pm to theBeard
As a 1099 employee I would think you could take all those deductions and tax write offs without forming an LLC.
What type of contract work are you doing? Is there some liability that you need to protect yourself from? If so, an LLC can be a vital way to set up a line of defense against personal liability.
What type of contract work are you doing? Is there some liability that you need to protect yourself from? If so, an LLC can be a vital way to set up a line of defense against personal liability.
This post was edited on 10/1/13 at 12:56 pm
Posted on 10/1/13 at 3:02 pm to AnonymousTiger
quote:
Is there some liability that you need to protect yourself from
Liability is a factor, looking to protect personal assets, and maybe a break on self employment taxes
Posted on 10/6/13 at 8:13 am to theBeard
The bigger question is determining how you want to be taxed. It might be more beneficial to be taxed as S-corp versus a disregarded entity.
Posted on 10/7/13 at 11:04 am to RushTigerLimbaugh
quote:
RushTigerLimbaugh
quote:
Looking to start an LLC to have the company pay the LLC and I withdraw from the LLC.
that's exactly what you do in a self employment situation. my S corp is the exact same way
Posted on 10/7/13 at 11:06 am to Savoiecorey
quote:
It might be more beneficial to be taxed as S-corp versus a disregarded entity.
this is the route I took after talking to my CPA. filing everything was super easy. he did everything, I just had to review and sign a few things.
Posted on 10/7/13 at 8:34 pm to TH03
quote:
Looking to start an LLC to have the company pay the LLC and I withdraw from the LLC.
that's exactly what you do in a self employment situation. my S corp is the exact same way
I bet you didn't start the LLC and then "withdraw" from it. An LLC operates through its member(s). If he "withdraws" from the LLC then the LLC's existence would cease because the LLC would be without members.
I agree that an LLC can be used for a legitimate business purpose when a person wants to provide contract labor or self-employ. However, I would be very weary of starting an LLC to do work for a company, having the company pay the LLC for the work that I did, and then withdrawing from the same LLC.
If the goal of the LLC was to provide limited liability (along with other taxation concerns unrelated to the LLC's veil of limited liability), then that goal would collapse when the sole member withdrew. The LLC would be incapable of providing him with limited liability because he would no longer be a member. That's what I thought was kinda silly/illogical about this business arrangement. If you want to go down this path why would you then "withdraw" from the LLC?
This post was edited on 10/7/13 at 9:05 pm
Posted on 10/7/13 at 9:22 pm to RushTigerLimbaugh
Just took Business Entities, eh?
Posted on 10/8/13 at 6:38 am to RushTigerLimbaugh
maybe I stated the thought incorrectly. I would distribute earnings not "withdraw". I think the word withdraw is being over analyzed. Also the thought would be to not distribute all the profits but to leave some in the LLC as retained earnings. Maybe this would be the benefit of applying corp taxes and have the frist $75K taxed at the corporate rate instead of at the individual income tax rate.
I am still learning the ends and outs, and have not seen my cpa yet.
I am still learning the ends and outs, and have not seen my cpa yet.
This post was edited on 10/8/13 at 7:02 am
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