Are You Set Up As A Sole Proprietorship, LLC, Or S-Corp?
- Thread starter Fiver
- Start date
My accountant told me the same thing when I asked him if I should incorporate in Nevada or Delaware even though I'm based in Cali. He said, "Don't do it unless you want to get audited."
These state workers talk to each other and they know where you're doing business.
+1, I spent a long time trying to find the "right way" to register my S-Corp. Turns out, the "right way" is just to do it by the books, register in CA, pay the gov't everything they want from me and smile while doing so.
Yep. Until you get fed up, and leave the state of CA...
Unfortunately, I'm kind of stuck here for a while :angryfire:
We're set up with an LLC, but in CA, they charge a minimum $800 state tax even if you do $0 in revenue. This is primarily because the CA state legislature is greedy as fuck.
I have an S-corp, after grilling my accountant I was convinced I'd save in taxes the most with this.
This is what we've done. It's the best method for any small to mid range sized company. You get the tax savings and the legal protection all wrapped up into one.
The only reason to choose an s-corp over an llc depends on two things. What state are you located in and are you doing it for taxation or for asset protection. I use to do ass protection for punks that couldn't cover their own on the order of 2-300 mill a pop. When you get into that range, usually and offshore llc works best. But we would create multiple ones.. one for each property, brokerage account, business, ect. Then have a FLP (family limited partnership) designed on a 99/1% controlling interest to manage all of it. In the event that uncle sam wants a piece, he won't get a fricking dime cause by the time it is filled, all assets are set up to jump country juristictions.
Doubt your situation is that complicated, so my suggestion is if you are in most states (other than CA, NY, NJ, PA) an LLC will do great. NV and NH are the best to incorporate under. Some states like TX and others have no state tax so they are also great too.
I would only do S-Corp if you are combining some other strategies along with your business to minimize taxation.
Doubt your situation is that complicated, so my suggestion is if you are in most states (other than CA, NY, NJ, PA) an LLC will do great. NV and NH are the best to incorporate under. Some states like TX and others have no state tax so they are also great too.
I would only do S-Corp if you are combining some other strategies along with your business to minimize taxation.
You see, when I read shit like this, I wonder why everyone isn't an IBC.
It just sounds too good to be true... Where is the catch? Is it really as easy as calling up a lawyer in Belize, setting up a bank account there and receiving your debit/credit card by mail? lol
I know Americans are taxed no matter where their revenue comes from, but that isn't the case for other countries. Someone please enlighten us, why wouldn't I want to be an IBC? (I'm in Canada and coughing up 35% every year)
is it hard to do that?
I don't have an CPA yet.
and I want to do taxes myself until i do some more revenue.
help! :music07:
Had the registration date of the LLC for my new project coincide with my birthday, it was my present to myself.
I'm not sure if it's hard or easy. To set up the LLC, I just used LegalZoom. Probably could of went elsewhere and got it cheaper, but whatever, they have a good rep and I had the money to pay them.
I have an accountant / CPA that did the S-corp designation for me, so to be honest, I'm not too sure if that is easy or hard.
If you are ballin' on a budget, you should probably just skip over the LLC and S-corp designation for now until you are making some good money.
I was amazed how quickly I was able to register my LLC in Texas, every step of the process was online, the whole process was done the next day and I didn't need to pay the expediting fee if were to go through the mail. I had my EIN in the span of a few hours after that. I never would have given bureaucrats credit for that kind of efficiency without actually going through it myself.
Yeah, depends what state you're in how easy it is. I'm in Colorado and there is an online process that you can do in about 20 minutes for $50. (90 minutes if you read all the fine print).
The EIN can be done online in minutes for free and is the easiest part. Here is the link. This is a federal thing and is the same regardless of which state you form your company in. https://sa2.www4.irs.gov/modiein/individual/index.jsp
When you pay someone to obtain an EIN for you, they are just doing this form online for free on your behalf. You might as well save that money. When you fill out this form, you get the number instantly, but it may take up to 24+ hours for your number to come up in the EIN verification database necessary for loan applications for instance. You can use it to apply to networks immediately though.
If you're forming an out of state LLC, you'll probably need a registered agent service, but if you're setting it up in your home state you should probably just do it yourself. Talk to an accountant and/or tax lawyer about it first.
Many people advise out of state companies but often the benefits are debatable. Often your home state is the most reasonable choice. That being said, I have 2 "Wyoming Close LLCs". They provide some neat estate planning benefits I like.
If you're into shady stuff, you might consider which state/country will give you the best protection against liability. In that case, liability is probably more important than tax savings. Your accountant/tax lawyer probably won't know anything about this.
The EIN can be done online in minutes for free and is the easiest part. Here is the link. This is a federal thing and is the same regardless of which state you form your company in. https://sa2.www4.irs.gov/modiein/individual/index.jsp
When you pay someone to obtain an EIN for you, they are just doing this form online for free on your behalf. You might as well save that money. When you fill out this form, you get the number instantly, but it may take up to 24+ hours for your number to come up in the EIN verification database necessary for loan applications for instance. You can use it to apply to networks immediately though.
If you're forming an out of state LLC, you'll probably need a registered agent service, but if you're setting it up in your home state you should probably just do it yourself. Talk to an accountant and/or tax lawyer about it first.
Many people advise out of state companies but often the benefits are debatable. Often your home state is the most reasonable choice. That being said, I have 2 "Wyoming Close LLCs". They provide some neat estate planning benefits I like.
If you're into shady stuff, you might consider which state/country will give you the best protection against liability. In that case, liability is probably more important than tax savings. Your accountant/tax lawyer probably won't know anything about this.