Are You Set Up As A Sole Proprietorship, LLC, Or S-Corp?
- Thread starter Fiver
- Start date
I have an LLC that I just made for the fuck of it and even I don't know what the point of it is over just doing everything in your own name, assuming we're talking about affiliate marketing where no one cares anyway. Once I started branching out into app development and other things it helped to have a legit company but prior to that I really just did it for fun.
There are some benefits to having an s-corp but I don't think it makes a huge difference unless you're banking out the ass. This isn't directed at anyone in particular but if you're too stingy to hire a cpa and a lawyer to look at your specific business and tell you which one would work better, you're probably not in a position to benefit much from switching.
Another thing a lot of people don't realize is that if you work in affiliate marketing or any online industry, there are A LOT of things you can write off - computers, computer peripherals, phones, phone plans, internet, sound systems (if you need a sound system for anything related to your business ie. to sample ringtones, to test the sound effects in an app you're developing, etc), paid forum registration fees, etc. I spend a lot of money on electronics anyway so I "save" (read: "don't lose as much") a decent amount by knowing what I can and can't count as a business expense.
I definitely wouldn't recommend incorporating yourself in another country or trying to get around the tax system though. A lot of people get audited and as soon as you do, you're fucked. It's also not hard for them to see that if a guy with no income is living in a million dollar house and driving a Bugatti, there's something wrong. Yeah, the tax system is flawed so that the lazy liberal shits can benefit from our hard work, but that's just how the world works and there's no point trying to get around it.
There are some benefits to having an s-corp but I don't think it makes a huge difference unless you're banking out the ass. This isn't directed at anyone in particular but if you're too stingy to hire a cpa and a lawyer to look at your specific business and tell you which one would work better, you're probably not in a position to benefit much from switching.
Another thing a lot of people don't realize is that if you work in affiliate marketing or any online industry, there are A LOT of things you can write off - computers, computer peripherals, phones, phone plans, internet, sound systems (if you need a sound system for anything related to your business ie. to sample ringtones, to test the sound effects in an app you're developing, etc), paid forum registration fees, etc. I spend a lot of money on electronics anyway so I "save" (read: "don't lose as much") a decent amount by knowing what I can and can't count as a business expense.
I definitely wouldn't recommend incorporating yourself in another country or trying to get around the tax system though. A lot of people get audited and as soon as you do, you're fucked. It's also not hard for them to see that if a guy with no income is living in a million dollar house and driving a Bugatti, there's something wrong. Yeah, the tax system is flawed so that the lazy liberal shits can benefit from our hard work, but that's just how the world works and there's no point trying to get around it.
lots of bad info in this post, and you need to define "banking out the ass". an S-corp has tax savings easily at 50k/yr profit
really? looks like I'm wrong then lol. What type of savings are you talking and if it's anything substantial is there any point to being an LLC?
Is it possible to form a LLC in US/Cayman Islands even though i'm not a citizen of US/Cayman islands nor do I have an office there ?
Why don't you take your own advice and hire a good CPA to find out the answers to these questions.
you can be an LLC that elects to be taxed as an S-corp. Makes paperwork easier.
Hi Mike,
Yes. You can do this in the USA. I don't know about Cayman islands rules, but I'm familiar with some of the US states.
Laws and terms may vary slightly from state to state.
The trick is that you'll need to use the services of a registered agent service. They usually charge a little extra if you are out of country vs out of state.
Expect to pay $200-$400 per year for the registered agent service. +$50 to $200 per year for LLC annual fees.
What they provide is an address and optionally, a phone and fax number. Also, they will forward mail to you. The main reason this physical presence is required is in the event that you are served papers (meaning someone is suing you)
Having an LLC in the USA like this gives you a legal entity presence in the USA. You can use this company to open CPA accounts/Adsense accounts etc. That might not accept you from your home country.
The LLC is similar to a person legally in that it pays taxes in the USA, can break the law, and be fined for criminal infractions or sued in civil court. It can be dissolved (cancelled) at a point later in time if you don't need it anymore.
One nice thing about a registered agent service is that the address is not a "PMB" address like you'll find at mail forwarding services. Some companies you may want accounts with will not accept "PMB" addresses typical of mail forwarding services and this is a way around that. Add a forwarded US phone number and you achieve a presence indistinguishable from a US citizen.
I would choose Nevada or Wyoming. Delaware used to be quite popular. Several other states have no (state) income tax and would be OK choices.
LLC due to the reduced record keeping and filing requirements. I found an S Corp was no good if I wasn't willing to keep all the proper records, etc.
Sole proprietorship but planning on switching over to s-corp when I get more employees for tax reasons.
I set up my LLC by myself, $40. These companies like legalzoom, and especially all the Deleware and Nevada "help" are just middling everyone. Many times I have found lawyers to make things worse.
I already have an S-Corp, probably should have just set up another s-corp, but did the LLC due to what another poster was referring to (covering celebs).
I had 2 LLC's and made one an S-corp holding company for the other one for taxes. Definitely best to talk to an experienced business tax accountant.