Forming your own LLC and doing contract work
 

I put in my resignation late last week. It was suggested today I might be able to do some contract work for them remotely which has me intrigued. Who on CP has formed their own LLC and done some contract work. Any suggestions on how to handle it? Would you go some other route?

I had a lawyer do an LLC. It is basically a shell corporation for liability reasons. It costs 40 bucks a year to reaffirm it with the state. I do not remember the original cost because it was done when I did the will/trust.

You may be able to do an easy LLC with Legalzoom. Or with a lawyer friend.

LLC or S Corp. Talk to an accountant. S Corp saves a ton on tax write-offs.

I created an LLC in March. I would highly encourage you to use LegalZoom as I did.

Get the legal addition and the compliance addition. Skip the accounting unless you bad with the spreadem sheets.

California charges all LLCs 800 smackers almost immediately so thank your lucky stars you don't live here.

Then again I'm spending the 4th on a boat watching the fireworks over the Pacific so I guess you get what you pay for.

This

Ya gotta look out for number one and try not to step in spreadem sheets.

We may be moving states fairly soon and it sounds like the LLC you have to reregister in your new state. Do you know if you have to do that with the S Corp?

You still haven't left Omaha?

Yeah done it.

LLC or S-Corp doesn't matter really, still register in the State... You have to file Articles of Incorporation with the State for a S-Corp.

S-Corp just, really, declares pass-through taxation to the members rather than being taxed as a C-Corp. A LLC can actually choose to be taxed as an S-Corp.

No real reason to be an S-Corp unless you intend to pay yourself a salary from the earnings of the business and expect there to be additional net income. All you really need is to file as an LLC to help protect your personal assets, which both do. Now, if you do elect S-Corp status as an LLC, you can reap the benefits of less Payroll Tax and not having so much paperwork for a C-Corp and everything functions pretty much the same.

Then, get insurance. General Liability, Errors and Omissions, and Data Breach should be of primary importance if you're doing consulting and working with another company's data and providing them suggestions.

What do you do for a living?

Nope, I had kind of been waiting on the perfect job to make the move. I think I just found it. Work from home and work from anywhere in the US.

Well, I am currently doing healthcare analytics/heathcare IT but I am doing a slight change in my direction as I am still in healthcare doing "IT stuff" but it really isn't analytics.

Oh hell yes.. If you have a chance to pull that off. Get after it.

There is no initial cost. In Kansas anyway.

This is not correct. All business expenses are deductible with either entity. S Corps are pass through income rather than self employment, but you have to pay yourself a reasonable wage. See Crow's comments.

Definitely talk to an accountant. There will be a return to file, plus you have to keep a set of books, so whatever you do make sure they're on board.

Really, you don't need to. In Kansas you just have to apply through the SOS website and fill it out. If it's a single member LLC, you won't need an operating agreement per se. If you have a partnership definitely see an attorney so either party gets ****ed.

Don't think so, you just have to file the return in the state that it is formed.

The bolded is the crux of the issue. And the way I try to explain it to people is if you want to do anything that are balance sheet activities, purchase assets, service debt, retain earnings, build operating capital, all don't hit the income statement (and tax return), that makes it make sense for an S-Corp.

I don't know the rules if it is a single member LLC, it may not be able to be taxed as an S-Corp. Talk to your accountant.

I'd do it. For me, it made me start treating my business as a business and made me a better businessman. Not that I didn't know what I was doing on the business side of things, but having it separated forced me to do a little bit of it and made it far easier for the rest of it.

You didn't say, but if you're going to quit your job and do this instead, DEFINITELY do your due diligence. Then if you do it, save up a pile of money.

I've seen several fools do it and they blow through every dollar of revenue then something unexpected, like, "WHAAA I owe taxes? HERP DERP" and then they struggle.

Plus if you're going to do it, get yourself a solid understanding of your expense. Because while it is deductible, it isn't free. Know your expenses.