I know this has been talked about a lot on this forum but I just watched a very good video from a lawyer on why it is important to form an LLC. I currently run my business as a DBA but I will be changing that next month.
I would love to hear your thoughts!
P.S.
Please keep responses good and clean;) This may help someone!
A lawyer tends to say LLC while a CPA says DBA unless you have assets. There isn’t any blank statement for either. It must be an individual case-by-case reason to do one or the other.
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I agree! I’ve heard both sides. It is an individual decision.
Much of this depends on your States Corporation laws. There’s also your specific situation regarding assets, insurance, risk of litigation, etc… I will encourage you to seek the advice of a qualified professional. Like elective surgery, always get more than one opinion.
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I agree! I talked to my tax and business professional just as everyone else should. Thank You for your insight!
To be an LLCS/S-Corp you should really be making a minimum of $50k per year (I think a little above that actually), personal opinion. You must also set up paying yourself a “wage” - and be able to file that with your state and the feds (the feds will require you to pay yourself a decent wage - you can’t just set if up for the tax break - paying yourself is a MUST). Most people need an accountant to do all of this… which gets pretty expensive. You will also need a lawyer to make the conversion to LLC/S-Corp, another expense. My advice would be to make sure you are making a good wage for a few years before establishing a LLC or an S-corp. If your business is well established where you can have a “reasonable prediction” of your yearly salary it is very beneficial to become a LLC/S-Corp - IF you are making enough money.
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Another thing some people may not realize is that you will still need to pay quarterly taxes on the business - along with the personal paycheck to yourself as an employee (that check will have soc. sec., medicare, self employment taxes etc. taken out). You will also have to file taxes as an employee and as a business. I have run as both in a previous business. I can honestly say the S-corp saves you money when you are making over $70k, but is also a lot more complicated. I had to hire an accountant to help me throughout the year and it was a pretty big added expense. Something to think about for everyone…
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$50k per year after expenses or before?