How to work under a LLC?

It looks like I have a new client who prefers that I run my invoices thru an LLC. I have said LLC but have never used it. I will be getting an EIN this afternoon. I can figure out setting up a bank account. Is there anything else I really need to know? I figure set up the bank account then pay myself out of it once or twice a month. Then just deduct the mileage on a Schedule C like I always have done. Is there anything else much I need to know or do?

Quote: AZDuffman

It looks like I have a new client who prefers that I run my invoices thru an LLC. I have said LLC but have never used it. I will be getting an EIN this afternoon. I can figure out setting up a bank account. Is there anything else I really need to know? I figure set up the bank account then pay myself out of it once or twice a month. Then just deduct the mileage on a Schedule C like I always have done. Is there anything else much I need to know or do?

You must incorporate. S corp?

Quote: pew

You must incorporate. S corp?

No S. LLC.

Whether you use an LLC or a Subchaper S corportation to avoid double taxation the critical element is to FOLLOW THROUGH.

Both the LLC and the Corporation option will require you to ACT as if the LLC/Corporation is a separate entity.

LLCs are simpler but still must have a set of books that show the LLC gave you a new business card, the LLC set new hours for you, the LLC reimbursed you for gasoline expenses, the LLC gave you a year end bonus, ... if you just set it up and forget it, the IRS and anyone else can say 'don't give me no LLC guff, you didn't treat it as if it really existed and so neither will the courts when you get sued'.

Quote: AZDuffman

It looks like I have a new client who prefers that I run my invoices thru an LLC. I have said LLC but have never used it. I will be getting an EIN this afternoon. I can figure out setting up a bank account. Is there anything else I really need to know? I figure set up the bank account then pay myself out of it once or twice a month. Then just deduct the mileage on a Schedule C like I always have done. Is there anything else much I need to know or do?

An LLC needs to be registered with the state you choose. There are also some requirements like registering your list of officers and occasionally having official meetings and keeping minutes. It is all real simple and you shouldn't have any problem. I have registered a few LLC's in Nevada and it usually ends up costing about $400.

Isn't LLC same thing as Inc.? You just use the designation you think looks better on your business card.

I don't know much about payroll taxes in the US but you will now be responsible for paying both the personal and company portion of them.

Quote: pew

Isn't LLC same thing as Inc.? You just use the designation you think looks better on your business card.

NO.

Corporation creates a legal entitity and requires certain reporting and record keeping or it can be pierced by the IRS and creditors.

Subchapter S corp is simply a corporation that is so closely held that it would be wrong for the IRS to tax the corporation and then when the corporaton declared a divident to its owners, tax the owners on their dividend income. Its an election that has tax consequences and legal consequences.

LLC is a designation. No articles of incorporation just a pro forma listing and filing. Name reserved. etc. Usually far less nuisance or cost than a corporation.
Even an LLC is still going to reqire some paperwork along the way to establish that it was regarded as a separate entity.

Most condos and houses are owned by LLCs these days. If held in a corporate name a condo is corporate owned personal property and the stockholders of the corporation own Personal Property, securities, with different rules for inheritance, taxation and sale. Corporations MUST be represented bylegal counsel.

Hire a lawyer or CPA or whatever. make the RIGHT decision and do not shirk from keeping even the minimal set of books of an LLC.