In reading posts, I’ve read that some people think it’s good to create a LLC to protect your personal assets. I’ve been looking on the IRS website, but don’t actually understand it all.
For those of you that have a LLC, how do you create the corporation? The IRS website says that if the LLC is a single member, but not classified as a corporation, it is a disregarded entity and taxes are done as your individual taxes (at least that’s what I understand).
Do I need to get an EIN first, or set up the LLC first? Any helpful information will be greatly appreciated. However, I don’t want answers or comments that are made to make me feel like I should already know the answer, because if I did, I wouldn’t be asking.
Thanks again for your help or advice.
I just set up my LLC here in Washington state. While I’ve seen that there are several youtube videos about setting them up, and whether or not you should, I didn’t watch them; I just went ahead and did it.
In Washington, we can go to the state website, and do a search which sent me to the Washington Secretary of State website (the SoS owns creation of business entities, at least here in WA).
First thing was to do a name search, to see if the name I wanted (Evergreen Signing Services, LLC) was available. Some other names I first thought of were already taken.
I then did a domain search on GoDaddy.com, to see if I could get the website name. It was available, so I bought the domain name.
Back to the SoS site: I filled out their online form, paid the fee, waited a couple weeks, and got first an email, then snail mail with my LLC documentation.
Finally, I went back to the state website to get a business license in the name of the LLC, vs. in my own name.
Incidentally, I had already gotten my notary license, and had started taking some signings in my own name. I’m really not sure how to take signings in the LLC name, so maybe this is all dumb? We will see.
Oh, as far as the EIN: I was able to get the LLC using my own social security number, but intend to get an EIN and change the LLC down the road.
It’s doubtful that anyone would think you should already know the answers, otherwise, you’d not be creating the query.
The safest (and best) choice would be to consult an attorney for guidance regarding your decision of how to structure your business & simultaneously protect your personal assets. Each business owner’s situation can vary widely.
As a business owner, the onus is upon you to ensure that you’ve performed due diligence to protect yourself, your business, & personal assets. You’ll also want to be cautious about asking for legal advice in a forum so as to avoid any involvement/appearance of potential Unlicensed Practice of Law [UPL], pam1. Certainly, it can be accomplished without consulting with an expert, but the question will remain if that business structure will best suit a particular business situation. Research & caution warranted here.
Your next strategic & sagacious step would be to consult with a CPA or Tax Enrolled Agent to ask these types of questions. They are the trained experts who provide this type of guidance/assistance.
If you do a Search on the Notary Café Forum [see Magnifying Glass on the Ribbon above] and enter “LLC,” a plethora of data will present itself to you for your review & use. The following are a few RECENT threads from a Search of “LLC”:
I am not an attorney so no legal advice coming from here. Having owned my own business for about 30 years, I set up my LLC to insulate my personal assets from the business assets. While waiting for the LLC to go through, I got my EIN and the once LLC was official, got a business bank account. All invoices come from the LLC. Some clients still send checks to me but as I’m the only signer on the checking account it doesn’t create a problem
I set up LLC and then requested EIN. Depending on what state you are in — check if you also have any local licensing requirement. When I used to open up entities out of my state for a medical staffing start up, some states had additional city registration requirements. If you are not sure, be sure to give your Secretary of State office a call. Check on state level and ask them if your city has local licensing requirement.
Hey Pam, so you are correct that an LLC protects your personal assets if you were to get sued and for what we do that is a great benefit. So a single member LLC can have their taxes done on a schedule c form, but that depends on how you choose to be taxed, like if you were a s corp for example. In regards to the EIN you would have to obtain the LLC first in order to get an EIN. All of this just really depends on your preference and how you would like to be set up as business. This is just general information. If you want something more specific I think I can help just reach out to me. I’m a tax preparer as well and a notary and I specialize in self-employed taxes.
Thanks so much. There is so much to learn! I have a tax question. I’m not asking for legal advice (just to put that up front ). I’m in Texas and have been doing a lot of reading about sales tax online. What I’ve found is that notary public services are not subject to sales tax. I cannot, however, find information about notary signing agents. Do you know where I might find the answer? I’ve looked on the SOS and comptrollers websites and cannot find an answer.
Sales tax? We are not subject to collect sales tax unless you sell products. If you are referring to self employment tax both notaries and notary signing agents pay self employment tax. The notarial acts is what are tax-exempt (self employment) We still have to pay federal taxes on it. There is no information on the SOS or NNA with this info. It is found on the IRS website but only specify notary public not signing agents because you can be a notary public and not a signing agent but you can not be a signing agent without being a notary public.
But I’ll give you an example, in TX our max fee is $6 per acknowledgement right. So let’s say someone calls you to notarize a VSF form so that they can get their vehicle out the tow yard. It’s one piece of paper with one acknowledgement one signature. That’s $6. Now let’s say you have to travel to that person’s location and for the sake of this example I’m just going to say the travel fee is $1. So the total this person will pay is $7.
Now when you do your taxes, let’s say it was the $7 for the year,$6 of your total $7 are self employment tax exempt because that is the fee for your notarial acts. Everything else that you charge whether it be a travel fee, a late fee, a print fee, things like that you pay taxes on all of that.
So when it comes to a closing that same concept applies. Let’s say you have a buyer closing for $100 and it’s one signer. When you look over the paperwork you can see that there is a total of 8 acknowledgments. With one signer that is a total of $48. Now when you do your books it is highly recommended to itemize if you want to take advantage of the tax exemption benefit. On your receipt or invoice, however you want to do it, you would put $48 for notarial acts and $52 for whatever else (which equals the total fee). So when you do your taxes at the end of the year $48 is exempt from self-employment tax and the $52 is regular taxation. Sorry so lengthy but I wanted to make sure I explained it right. Does this make sense?
firstfruitsolutions is correct. Just know that taking this ‘notary deduction’ WILL have some effect on your Social Security (reduces income upon which SS is based). That may or may not be important to you…just worth the warning.
This can be true. Every business situation is different, which is why you should consult a professional for your specific situation. You can always check where you currently stand on the social security website where it shows you your retirement age, future average annual salary, and what your benefits may be if you took early, full, or delayed retirement.
Yes, it makes sense. On the Texas comptroller website, it says if “you sell taxable services in Texas.” Although just notarizing documents isn’t taxed, I was not sure if loan signing falls under the category of a taxable service.
I like the way you explained the itemizing, because that is how I had thought about it. but wasn’t sure. You clarified it for me. Thank you!
I understand that federal income taxes are a separate thing. It seems like everything I learn makes me think of another question. Thank you again for your help!
You’re very welcome. There is a lot of information out there and although most of it isn’t wrong it may be wrong for your situation. When I sit down with a notary client the 1st thing I ask is how the business is structured because that will tell me how you’re taxed, what bracket you sit it, and all deductions that should be considered. Then I ask about the client’s goals because that also determines how to go about deductions and other situations to consider. I’m just doing my part to give out to right information