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1099: Should I start a LLC
Posted on 1/14/18 at 1:51 pm
Posted on 1/14/18 at 1:51 pm
Starting late last year I started working a side job where I will be receiving a 1099. I am expecting to bring in 25-30k for 2018. My role is basically sales and IT. Business expenses are phone, internet, gas, email, website, and advertising cost.
Is there anything I can do for 2017? Should I start an LLC or some other type of business? Any advantages/disadvantages to opening a company vs. not?
Any help is greatly appreciated.
Is there anything I can do for 2017? Should I start an LLC or some other type of business? Any advantages/disadvantages to opening a company vs. not?
Any help is greatly appreciated.
This post was edited on 1/14/18 at 2:20 pm
6
Posted on 1/14/18 at 2:43 pm to readysetgeaux
I would do it just on the basis of the liability protection. No major tax advantages unless you are making >$125k or so income, and then you could make S-Corp elections.
I’d go for it just because LLCs are extremely cheap to start up and maintain.
I’d go for it just because LLCs are extremely cheap to start up and maintain.
Posted on 1/14/18 at 6:09 pm to readysetgeaux
I'm in the same situation as you. I bookmarked this thread.
Posted on 1/15/18 at 7:36 am to LSUcam7
Liability protection? Most states offer zero liability protection for single member LLCs.
An S-Corp is a no brainer since you can play around with the distributions/wages and not pay SE tax on distributions. Just know that you will have to do a payroll quarterly and double check to make sure your state doesn't add on any additional taxes for an S-Corp.
An S-Corp is a no brainer since you can play around with the distributions/wages and not pay SE tax on distributions. Just know that you will have to do a payroll quarterly and double check to make sure your state doesn't add on any additional taxes for an S-Corp.
This post was edited on 1/15/18 at 7:39 am
Posted on 1/15/18 at 9:50 am to readysetgeaux
Do you do your own taxes?
A CPA is gonna charge a lot more to do taxes for LLC, set up salaries and monthly payments etc
You need to make sure anything you will save in taxes by funneling through LLC will not be offset by increased cost of tax prep
A CPA is gonna charge a lot more to do taxes for LLC, set up salaries and monthly payments etc
You need to make sure anything you will save in taxes by funneling through LLC will not be offset by increased cost of tax prep
Posted on 1/15/18 at 12:01 pm to Cosmo
Probably doesn't need a CPA, can just find a good bookkeeper. If OP is savvy enough he could do his own payroll.
Posted on 1/15/18 at 12:37 pm to TheOcean
quote:
zero liability protection for single member LLCs.
If a spouse is on the payroll in some way, this solves.. correct?
Also..
Does a manager-run LLC make a difference?
Posted on 1/15/18 at 12:42 pm to readysetgeaux
quote:
side job
I don't think at this time you need to incorporate for the sake of incorporating. I think the benefits are limited unless you plan on growing this side job to a full time venture.
Posted on 1/15/18 at 1:31 pm to Cosmo
I do my own taxes but up until now, the wife and I have been strictly W2 employees so it has been pretty easy.
Posted on 1/15/18 at 1:42 pm to YipSkiddlyDooo
This will never overtake my primary job. I do not think liability is a major concern as someone mentioned before.
I am really just paid commission for selling a product.
I was hoping by incorporating, I would have a lower tax rate than my personal and the ability to write-off my expenses.
For more information.
Married filing jointly, both W-2 employees 160-190k AGI.
Side venture - 1099 for commission. ~30k.
Website/Advertising expenses - ~3k, but if possible I would like to write-off mileage, internet, and cell phone.
I am really just paid commission for selling a product.
I was hoping by incorporating, I would have a lower tax rate than my personal and the ability to write-off my expenses.
For more information.
Married filing jointly, both W-2 employees 160-190k AGI.
Side venture - 1099 for commission. ~30k.
Website/Advertising expenses - ~3k, but if possible I would like to write-off mileage, internet, and cell phone.
Posted on 1/15/18 at 4:12 pm to TheOcean
quote:
Probably doesn't need a CPA, can just find a good bookkeeper. If OP is savvy enough he could do his own payroll.
The issue is going to be, can he do his own S Corp return?
If his gross is 30K before expenses... and he has to pay himself a reasonable salary, the payroll tax savings might not be all that much. Just kinda gotta run the numbers and see.
Posted on 1/15/18 at 7:01 pm to LSUFanHouston
What's the going rate for an S Corp return from a CPA?
I know some pretty solid bookkeepers that do solid work and a far cheaper than a CPA. OP probably doesn't need a CPA
I know some pretty solid bookkeepers that do solid work and a far cheaper than a CPA. OP probably doesn't need a CPA
This post was edited on 1/15/18 at 7:05 pm
Posted on 1/15/18 at 7:03 pm to LSUcam7
Depends on state law. Where I practice an LLC can be either member managed or manager managed -- neither would make it beneficial liability wise if it's a single member LLC and not in a jurisdiction like Nevada, Delaware, etc.
Having the LLC owned between a husband and wife is fine. If OP is in a state where tenants by the entirety ownership is allowed -- owning an LLC with your spouse as TBE is pretty damn solid liability/asset protection wise. Just need to make sure you have a good operating agreement, file your annual reports, and probably hire an attorney to set everything up initially.
Having the LLC owned between a husband and wife is fine. If OP is in a state where tenants by the entirety ownership is allowed -- owning an LLC with your spouse as TBE is pretty damn solid liability/asset protection wise. Just need to make sure you have a good operating agreement, file your annual reports, and probably hire an attorney to set everything up initially.
Posted on 1/15/18 at 7:10 pm to readysetgeaux
Is this meant to be a going concern? If so, don't do an LLC
What liability is arising from this side job that you need protection from?
What liability is arising from this side job that you need protection from?
Posted on 1/15/18 at 7:26 pm to readysetgeaux
The new tax law should have benefits for a pass through corporation. It probably would be beneficial to be a LLC or a S Corp, but I don't think how beneficial has been settled yet.
So pass through means to a Corp that is set up but the money passes through your business and shows on your personal income taxes. They added nice benefits to the tax package right before it passed.
I'm not an accountant, but I listen to money pod casts, bug the crap out my act, and stayed at a holiday inn express.
So pass through means to a Corp that is set up but the money passes through your business and shows on your personal income taxes. They added nice benefits to the tax package right before it passed.
I'm not an accountant, but I listen to money pod casts, bug the crap out my act, and stayed at a holiday inn express.
This post was edited on 1/15/18 at 7:31 pm
Posted on 1/15/18 at 11:18 pm to TheOcean
quote:
owning an LLC with your spouse as TBE
I live in FL. This is great advice, thanks.
Posted on 1/16/18 at 10:25 am to LSUcam7
FL is the mecca for asset protection. 
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