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Junebug0525 (original poster member #29142) posted at 2:56 PM on Saturday, January 11th, 2014
I'm forming an LLC for photography. I have no idea what I'm doing! I never took business classes and not quite sure about the tax stuff. Anyone ever done this before? Advice?
Me: BS
Him: WXH DDay-11/22/2009~ D~ 10/25/10
OWhore: Co-worker (7 years younger)
"Sometimes good things fall apart so better things can fall together." AND THEY DID!!!
NotDefeatedYet ( member #33642) posted at 3:23 PM on Saturday, January 11th, 2014
Make a business account for ONLY business expenditures. If you link your personal account to your business account, or make personal purchases out of the company account, you lose your LLC protection. You can link them electronically so you can easily transfer money between the two though.
The paperwork here was easy. You fill out the paperwork through the state attorney general and pay your fee. You should be able to go online and look to see what business names are taken. We have a business tax, but unless you make more than $250K a year, you aren't required to pay a tax. You are, however, still required to fill out the form and send it in indicating you owe nothing. Check for that sort of stuff in your state.
It's not that difficult, but there are things you learn along the way. We started an LLC in 2010 and that is my wife's full time job.
"It's a fool that looks for logic in the chambers of the human heart."
sisoon ( Moderator #31240) posted at 11:07 PM on Saturday, January 11th, 2014
An LLC has advantages over a corp, but in Illinois it's $400/year, and a corp is $100. For a micro-business, I think the corp is a better structure in Illinois. Check the costs in Texas.
[This message edited by sisoon at 5:07 PM, January 11th (Saturday)]
fBH (me) - on d-day: 66, Married 43, together 45, same sex apDDay - 12/22/2010Recover'd and R'edYou don't have to like your boundaries. You just have to set and enforce them.
tushnurse ( member #21101) posted at 12:41 AM on Sunday, January 12th, 2014
We did this for our bee business this past summer and I too have limited experience with business and tax law. We set up a separate account with Bank of America and they helped with the LLC forms and submission.
We made sure we came out no profit for tax purposes this year per my Husbands rec's he has a business finance degree and knows a lOt about tax laws due to his occupation. The extra funds we had at end of bee season were invested in equipment.
Me: FBSHim: FWSKids: 23 & 27 Married for 32 years now, was 16 at the time.D-Day Sept 26 2008R'd in about 2 years. Old Vet now.
unbreak_my_heart ( member #12145) posted at 9:54 PM on Sunday, January 12th, 2014
check with a licensed CPA in your area, they can and will explain it to you. And help with your needs. (check with a few to get a feel of who will be best for you, most have free consultations)
HAPPILY RECONCILED!
I ♥ my Husband!!!
lynnm1947 ( member #15300) posted at 10:31 PM on Sunday, January 12th, 2014
In Canada, the governments have booklets that inform you of all the stuff you need to do to get started, and to keep up month to month.
Age: 64..ummmmmmm, no...............65....no...oh, hell born in 1947. You figure it out!
"I could have missed the pain, but I would have had to miss the dance." Garth Brooks
Junebug0525 (original poster member #29142) posted at 4:59 PM on Thursday, January 23rd, 2014
Thanks all! It's formed, just need to sit down with a CPA for the tax stuff!
Me: BS
Him: WXH DDay-11/22/2009~ D~ 10/25/10
OWhore: Co-worker (7 years younger)
"Sometimes good things fall apart so better things can fall together." AND THEY DID!!!
TrulyReconciled ( member #3031) posted at 6:03 PM on Thursday, January 23rd, 2014
The best advantage is that (as a single-member LLC) you don't do payroll taxes. You bring home draw and pay income tax on that.
As a sole member, you may be exempt from paying workman's comp insurance on yourself too - depending on state law.
[This message edited by TrulyReconciled at 12:07 PM, January 23rd (Thursday)]
"In a time of deceit, telling the Truth is a revolutionary act."
sparklezombie ( member #40095) posted at 6:58 PM on Thursday, January 23rd, 2014
I've done this before. I own my business and have for 5.5 years. I also counsel business clients and set up LLC's and Corps as part of my job.
An LLC is great for liability protection, but talk with a CPA about filing an S-Corp election. This will allow you to take a reasonable salary (upon which you pay employment taxes as an employer of about 15%), then anything over that reasonable salary does NOT incur the employer taxes. So you save 15%. It's huge in the long run.
I generally recommend that you use that savings to beef up your retirement. You can use a SEP IRA or a Simple IRA (depending on whether you have employees or not). You don't need a 401k for a small business - the fees are way too high. I have two employees and have a simple IRA. Works great and is cheap.
Talk with the CPA about setting up Quickbooks. I know it may seem like overkill when you're first starting out, but QB is universally known by CPAs, easy to find support on and easy to use. It will allow you to track your spending, clients/customers, income, expenses and do taxes really easily. You can also do payroll through QB for an additional yearly fee. I use it and love it. I can email the file to my CPA to work on and he sends it back to me.
Keep all business and personal stuff separate. I use a business credit card (through Citicards) and put all business expenses on it. Don't commingle accounts. Period. Don't do it. The LLC won't work to protect you if you commingle accounts.
The bottom line is that finding a good CPA will be worth the time and money. Find one that works with small businesses so the fees will be reasonable.
If you want to chat more, feel free to send me a message.
BS: Me
WH: Husband
One daughter - 22 months
Married 11.5 years
2.5 false R's.
Status: Divorcing.
You can't pick up a turd by the clean end. Time to flush the toilet.
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