what are the benefits of a LLC?
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This is the best book you can buy on this: Amazon.com: Incorporate Your Business: A Legal Guide To Forming A Corporation In Your State 3rd Edition: Books: Anthony Mancuso
or read the info on their site first:
How to Form a Corporation
or read the info on their site first:
How to Form a Corporation
Advantages are limited liability for shit you do now and tax savings. Right now, everything you make you gotta pay taxes on as self employment income. So you income and self employment taxes. With an LLC, all the income goes to the business and the business pays you as an employee.
single member llc pay SE tax on all profits, cannot write off your salary i believe. s-corp is where you can not pay se tax on your salary.
...basically, speak to an accountant.
Whether it's beneficial to register an LLC or not depends on your desired exposure to liability but also, more commonly, on the possible tax benefits. An accountant would need to look at your situation to advise you.
Generally in the UK, for example, tax-wise it's not worth registering an LLC until you make approximately over £35k(?) a year profit.
However, there are other benefits to LLCs - credibility, that warm feeling that you know you own a legal business entity, etc.
Whether it's beneficial to register an LLC or not depends on your desired exposure to liability but also, more commonly, on the possible tax benefits. An accountant would need to look at your situation to advise you.
Generally in the UK, for example, tax-wise it's not worth registering an LLC until you make approximately over £35k(?) a year profit.
However, there are other benefits to LLCs - credibility, that warm feeling that you know you own a legal business entity, etc.
Talk to an accountant/attorney, you're getting a bit of mis-information here.
The books referenced above have *nothing* to do with an LLC, but are for forming a corp, whether a C-corp or an S-corp, the most complex forms of organization.
The basic benefit of an LLC is the limitation of liability. If you get sued, they can only go after the business assets. If you are operating as a sole proprietor or a general partnership, your *personal* assets can be targeted in pursuit of a business debt.
There are tax benefits to all of these organizational forms, but are all very situationally specific. If you are making enough money to worry about tax benefits, you can afford to pay for an accountant.
The books referenced above have *nothing* to do with an LLC, but are for forming a corp, whether a C-corp or an S-corp, the most complex forms of organization.
The basic benefit of an LLC is the limitation of liability. If you get sued, they can only go after the business assets. If you are operating as a sole proprietor or a general partnership, your *personal* assets can be targeted in pursuit of a business debt.
There are tax benefits to all of these organizational forms, but are all very situationally specific. If you are making enough money to worry about tax benefits, you can afford to pay for an accountant.
This is the exact reason I went with an LLC. Yes there are tax benefits, but the liability protection is the main reason. I don't want my personal assets ever to be put on the table should an issue of liability arise.
Also, there are different benefits depending on the state you incorporate in. My LLC is incorporated in Delaware. Delaware (and Nevada also I believe) are the two most corporate friendly states. You can get a lot of information from The Company Corporation online. That's who I did all my LLC work with, and still do.
There are definitely cheaper ways to do it, I just chose them because they have a great reputation and I didn't want to handle anything. I don't use all their yearly services anymore (like paying my LLC tax, I do that directly instead of paying them $40 to do it), but they do send me reminders about what things I need to take care of at certain times.
There are definitely cheaper ways to do it, I just chose them because they have a great reputation and I didn't want to handle anything. I don't use all their yearly services anymore (like paying my LLC tax, I do that directly instead of paying them $40 to do it), but they do send me reminders about what things I need to take care of at certain times.
Really I don't understand why people would run a LLC. For what we do S-Corp makes way more sense. Then you get to take dividends from the corp and don't have to pay yourself a salary at ( except in certain cases where you're a trained professional like a dentist or a doctor). This mean you only pay capital gains taxes with none of the BS crap that goes along with it. Now if you want to have you healthcare paid for by the corp with you have to do a c-corp and supply it to all your employees as well ( but if you have none, wink wink ). The other issue you run into with a c-corp is double taxation where an s-corp the earnings just filter down onto your personal returns as dividends. LLC's provide protections from suits but really suck when it comes to taxes. That's why you find people combo'ing them with other things. I'd get an attorney, it's worth the money and you're going to want someone local to form your corp anyways. Ask around because there's a lot of people that claim they know about asset protection and really don't.
Well said.
Just an FYI... you can have an LLC and have it treated as an S-corp for tax reasons. This is the best of both worlds... I highly suggest going this route.
IRS form 8832 tells the IRS how your LLC should be treated for tax purposes:
http://www.irs.gov/pub/irs-pdf/f8832.pdf
See your tax professional for more information.
i will echo what everyone said: talk to an accountant.
ive looked into this as ive already encountered the question myself. the main thing is liability. your ASSets are on the table when you operate as an individual. an LLC can have assets and, in the best case, NOT have assets if your sued
ive looked into this as ive already encountered the question myself. the main thing is liability. your ASSets are on the table when you operate as an individual. an LLC can have assets and, in the best case, NOT have assets if your sued
Are their any cases of affiliates getting sued over promoting offers/products? It would seem only the company selling the product would be at fault since I have never heard of a magazine/newspaper/tv channel getting sued for advertising faulty products that hurt people and ended up in lawsuits.
What kind of liability issues are webmasters/affiliates worried about?
What kind of liability issues are webmasters/affiliates worried about?
As Dorian said, you can choose to tax a single member llc as a sole proprietorship or as a corporation.
Businesses with Employees - Single Member Limited Liability Companies
Basically, you fill out form 8832 to elect your status as a C-corp or form 2553 to elect your status as an S-corp.
Easy peasy.
No real reason not to go with it, depending on your state. That's why if you aren't knowledgable about these things you need to find someone who is.
Here we go again...
This is not true at all.
I.R.C. 3121(d)(1) provides as follows:
(emphasis mine)
Furthermore, 26CFR31.3121(d)-1(b) clarifies this with:
Additionally, the US Tax Court has ruled on this matter several times, for example WATER-PURE SYSTEMS, INC. v. COMMISSIONER OF INTERNAL REVENUE
With an S-Corp, unless you are simply a passive shareholder (i.e. you don't do any work for the business) you are considered an employee and are subject to all relevant withholding including Federal/State income taxes, FICA, FUTA, SUTA, among others. You must pay yourself a reasonable salary, although a portion of profits may be paid out as dividends and then taxed as capital gains.
Needless to say, if you don't want the audit man's tax hammer to slam down on your ass, don't follow that advice.
Now, I may know more about tax code than PHP code and I even back my claims up with citations, but even still don't listen to me. I reiterate, the best tax advice you can get from a forum is to talk to an accountant and/or attorney.
And since I made you read all this boring shit, I'll make it up to you:
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