This headache with the Los Angeles City business tax has got me set on getting my LLC reincorporated with Nevada. I know there are some services out there that incorporate your business in Nevada, anyone recommend one?
Nevada LLC Services
- Thread starter BluAffiliate
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If your business is owned and operated in CA, you're pretty much screwed on this front. CA and especially from what I'm told LA will track you down and make you pay taxes. If you are a single person LLC, they will use where you pay rent, where you buy groceries, and where you get gas to prove that you are in LA, and not a legitimate NV business.
If you're planning on trying it anyway, at least use a brick-and-mortar CPA or lawyer to register your new LLC (register a new one, don't just "move"), and have that CPA or lawyer ACTUALLY PHYSICALLY LOCATED in Nevada.
Better still, if you have any friends or family in NV or CT, give them 1 share (.1%) of your company so that you're not a single-person LLC, and one of the members really is located in that state. It could mean the difference between a decade of back-taxes, ten years from now.
In addition to being a red-flag to the IRS, using a service like LegalZoom or Incorporate.com just sets you up for failure. When you get audited, and the IRS says "I see you live in CA, but registered on LegalZoom in NV; why did you do that?" do you want to say "Because I am a dumb asshole who thought that would help me pay less taxes, sir, please scrub my accounts and use my next paycheck to buy your wife a new car" or would you rather say "I think you need to talk to my lawyer/accountant about that, I have no further comment".
tl;dr -- You don't know tax law, you're a marketer. Get a lawyer, get a CPA, and just do what they tell you. When it comes to evading taxes, don't do it -- pay every goddamn cent you owe. It sucks, but we all do it. I refuse to float the state of California's downward spiral without your help.
If you're planning on trying it anyway, at least use a brick-and-mortar CPA or lawyer to register your new LLC (register a new one, don't just "move"), and have that CPA or lawyer ACTUALLY PHYSICALLY LOCATED in Nevada.
Better still, if you have any friends or family in NV or CT, give them 1 share (.1%) of your company so that you're not a single-person LLC, and one of the members really is located in that state. It could mean the difference between a decade of back-taxes, ten years from now.
In addition to being a red-flag to the IRS, using a service like LegalZoom or Incorporate.com just sets you up for failure. When you get audited, and the IRS says "I see you live in CA, but registered on LegalZoom in NV; why did you do that?" do you want to say "Because I am a dumb asshole who thought that would help me pay less taxes, sir, please scrub my accounts and use my next paycheck to buy your wife a new car" or would you rather say "I think you need to talk to my lawyer/accountant about that, I have no further comment".
tl;dr -- You don't know tax law, you're a marketer. Get a lawyer, get a CPA, and just do what they tell you. When it comes to evading taxes, don't do it -- pay every goddamn cent you owe. It sucks, but we all do it. I refuse to float the state of California's downward spiral without your help.
I'd actually move to Vegas. Rent there is dirt cheap. Visit LA on the weekends. You'll save on state income tax, fees, and LA taxes.
Incorp.com (Jimmy Z from there is great) will definitely help. How can the IRS see that you registered w/ Incorp.com (unless you use it as a registered agent). I registered an LLC with them a few months back and they were really helpful. It's only like $100 a year and they provide free mail forwarded (only NV).
I sense much fear in you, young padawan.
IRS collecting state taxes? Really? Confusing tax avoidance with tax evasion? Really? Expecting to avoid liability just because you have a lawyer and accountant? Really?
The real question is how exactly CA is going to enforce state taxes if all your business presence is out of state and they cannot dissolve your entity and seize your bank accounts.
If you have an actual precedent of CA taxes enforced across state lines, please by all means post it. We need less FUD and more specifics.
'Cause they are taxing everyone out here!
You got me -- I'm not a lawyer or a tax professional. I don't know a damn thing. Most of this has been spoon-fed to me by the guy I paid to do my taxes. Is he biased? Sure. But OP is free to take whomever's advice he likes, and assuming he doesn't know much more than I do (or why would he ask for tax advice on internets?) I don't think I gave bad advice.
Tax Avoidance != Tax Evasion, but the standard by which the difference is determined, from what I've been told (and what's been discussed in other threads here, and what some light googling also suggests to be the case) is that IF DAY-TO-DAY BUSINESS HAPPENS IN A STATE then that state will try to collect taxes. I don't have specifics, believe what you want. I hate FUD as much as anyone else, but when someone asks for business-sensitive advice on the internet, it's only reasonable that I try to provide him with a conservative answer that will help him protect his assets.
I've heard (hearsay) that in the case of sole proprietorships or single-man LLCs, the state of CA specifically will use personal financial records (supposedly made available to them by recent legislation) to determine where you live, where you work, and where you should pay taxes. I've heard (still hearsay) that CA is fucking vicious in their pursuit of this, especially in the past few years. Honestly, I base most my tax-based decisions off other people's (usually professional) advice, because I haven't personally read the tax code from cover to cover (and even if I had, I'd still hire a professional).
Am I full of fear? Yes. If you have anything at all to fear, your government is a good place to start. I work hard for my money and don't like paying taxes. I like even less the thought of being audited or later fined a large sum because I didn't read the full 67,000 page tax code. I'm not a professional "tax avoider", and from all that I know, there's a grey area between "avoiding" and "evading" that gets really fuzzy around NV LLCs, a grey area I'd rather not fuck with. Although there are businesses that hire super-tax-pros that get them through every loophole and squeeze dimes out of dollars, I can't afford to hire one of those guys to shuffle my money across four international borders into the Caymans for me.
So, because I'm smart enough not to ask for tax advice on Wickedfire, I'll hire someone, grow some balls and pay what I owe*.
* and if you hire a CPA, instead of using Corp4Tards.com, he'll help you ensure "what you owe" is as small as possible.
I'm going to precede my comment about your taxes, with another push to find an expert to help you at this. Every single person thats commented on here, in some way or another, is recommending something that MIGHT not work at all.
First, read "How To Be Invisible by JJ Luna"
Second, read "Asset Protection by Jay Adkisson"
Third, find an expert and ask a shitload of questions.
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There are two sections of concern that might make you go this route. #1 Taxes, and #2 (and in my opinion much more important) Liability.
If you want to go the whole "I operate in nevada route", you need to make the whole operation look legit. If your living and working in California, your going to need a California entity, straight up. The goal is to make the whole idea "make sense" to a judge and actually run each business like they were seperate businesses. Seperate books, seperate operating agreements, contracts between the companies, etc.
I could talk about this for ages, but I'm just going to make a recommendation of where to start, with the assumption you'll take my advice above, and answer all of your own questions.
Make your california company a legitimate "office business". It's job is hiring employees, managing the office, paying employees, and all that nonsense office stuff. (aka it basically spends the money, holds all liability, yet has no money sitting around to be sued for) Your vegas (or my preference, Wyoming) corporation is the "asset holding" business. It owns the merchant accounts and takes in all of the money. That company pays your California company for managing all of the office stuff, but definitely not more than is necessary to run everything, and maybe a small profit for "their troubles".
Preferably you have diversity of ownership on these two companies. Figure that out by reading the books above. Thats your start. PM me if you want to talk more.
First, read "How To Be Invisible by JJ Luna"
Second, read "Asset Protection by Jay Adkisson"
Third, find an expert and ask a shitload of questions.
---
There are two sections of concern that might make you go this route. #1 Taxes, and #2 (and in my opinion much more important) Liability.
If you want to go the whole "I operate in nevada route", you need to make the whole operation look legit. If your living and working in California, your going to need a California entity, straight up. The goal is to make the whole idea "make sense" to a judge and actually run each business like they were seperate businesses. Seperate books, seperate operating agreements, contracts between the companies, etc.
I could talk about this for ages, but I'm just going to make a recommendation of where to start, with the assumption you'll take my advice above, and answer all of your own questions.
Make your california company a legitimate "office business". It's job is hiring employees, managing the office, paying employees, and all that nonsense office stuff. (aka it basically spends the money, holds all liability, yet has no money sitting around to be sued for) Your vegas (or my preference, Wyoming) corporation is the "asset holding" business. It owns the merchant accounts and takes in all of the money. That company pays your California company for managing all of the office stuff, but definitely not more than is necessary to run everything, and maybe a small profit for "their troubles".
Preferably you have diversity of ownership on these two companies. Figure that out by reading the books above. Thats your start. PM me if you want to talk more.
Lots of interesting theories
If you remain a California resident it doesn't matter if you set up a NV LLC, the franchise tax board of CA will still get their pound of flesh. You'll only screw everything up with something like legal zoom but I am a NV lawyer, so I am biased. Lots of theories on this thread. If you want some facts you can PM me.
If you remain a California resident it doesn't matter if you set up a NV LLC, the franchise tax board of CA will still get their pound of flesh. You'll only screw everything up with something like legal zoom but I am a NV lawyer, so I am biased. Lots of theories on this thread. If you want some facts you can PM me.
this. calculate amount you'd have to pay more in tax if you'd be living in CA and use that for travel.
Anyone that doesnt use a real lawyer that specializes in this = idiot.
Before I set up my business structure I talked to about 5 local CPA's, 6 tax attorneys, and 3 estate planning attorneys separately over the course of about 7 months. We're talking about 3-4 hours each meeting that also included about a full 4 months of my own research.
Using state sponsored "do it yourself" forms and places like Legal Zoom will only fuck you in the end. Lee ( uplinked ) is right in what he said before and I have written on this subject several times in this forum myself. shortattract is also right in the mentioned of the books to read ( own them myself, but got them after my setup and they verified a lot of what I was told from the professionals ).
Also, anyone that is a single member anything ( LLC ) is just asking for trouble. I don't care what setup you have, if your a single member LLC you will be fucked if you ever get pulled into court for liability or tax issues and they really want to put it on you. Just ask a competent estate planning or tax attorney that has prosecuted single member entities in their past. You really don't have anything to hide behind if your single member and a judge or lawyer wants to come after you personally for something.
You can set yourself up right in the United States with the right structures ( note I used plural ), but the simplest way is having something that is offshore in a jurisdiction that is not so giving to the United States while having a corp structure here as well. Your US corp needs to make some money and have some profit, but that doesnt mean if has to be all your profit. Im not saying hide your assets or do somethign fishy like not pay taxes, I am simply saying holding shit in another jurisdiction will give you some time and some protection depending on your situation.
The USA does have extradition, tax treaties, and other formalities with almost every country in the world, but that doesnt mean every lawyer, IRS agent, judge, etc will go thru the troubles of going thru the red tape it takes. There are exceptions, like in capitol crimes, etc...
Don't be stupid, don't think your protected with just 1 setup, and for god sakes take the extra $400-$800 dollars it takes to buy some personal umbrella insurance with a cap of 2-3 million and some E&O insurance if your in advertising. You wouldn't believe how much this alone will protect you from personal liability in your business.
Before I set up my business structure I talked to about 5 local CPA's, 6 tax attorneys, and 3 estate planning attorneys separately over the course of about 7 months. We're talking about 3-4 hours each meeting that also included about a full 4 months of my own research.
Using state sponsored "do it yourself" forms and places like Legal Zoom will only fuck you in the end. Lee ( uplinked ) is right in what he said before and I have written on this subject several times in this forum myself. shortattract is also right in the mentioned of the books to read ( own them myself, but got them after my setup and they verified a lot of what I was told from the professionals ).
Also, anyone that is a single member anything ( LLC ) is just asking for trouble. I don't care what setup you have, if your a single member LLC you will be fucked if you ever get pulled into court for liability or tax issues and they really want to put it on you. Just ask a competent estate planning or tax attorney that has prosecuted single member entities in their past. You really don't have anything to hide behind if your single member and a judge or lawyer wants to come after you personally for something.
You can set yourself up right in the United States with the right structures ( note I used plural ), but the simplest way is having something that is offshore in a jurisdiction that is not so giving to the United States while having a corp structure here as well. Your US corp needs to make some money and have some profit, but that doesnt mean if has to be all your profit. Im not saying hide your assets or do somethign fishy like not pay taxes, I am simply saying holding shit in another jurisdiction will give you some time and some protection depending on your situation.
The USA does have extradition, tax treaties, and other formalities with almost every country in the world, but that doesnt mean every lawyer, IRS agent, judge, etc will go thru the troubles of going thru the red tape it takes. There are exceptions, like in capitol crimes, etc...
Don't be stupid, don't think your protected with just 1 setup, and for god sakes take the extra $400-$800 dollars it takes to buy some personal umbrella insurance with a cap of 2-3 million and some E&O insurance if your in advertising. You wouldn't believe how much this alone will protect you from personal liability in your business.
Is it still true I can setup a NV entity without any of the members/managers names and personal info or has legislation changed that already? Speaking on the anonymity of the setup of course.