Incorporating my Blog | Bloggers Lair | Yakezie Forums

wow the 5 figure mark…very impressive.

I have an LLC. I did my own operating agreement but had a lawyer do a review of it.

Here in MO it only costs $50 to set it up with the state and you don't have to file any paperwork with the state each year (although you do have to hold an annual meeting with the members of your company and write up the minutes). 

Our accountant does our taxes for this one on schedule C.    I don't yet take any deductions for an office, because I work all over the house and yard on stuff (love being outside).

My main reason was protection of personal assets.  If someone wants to sue my company, and if I follow all the rules for our state regarding keeping personal and business stuff apart, then they can only go after my business assets (at least the way I understand it).

Well after hearing from everyone I decided to form an LLC here in Michigan.  I searched through a ton of websites, researched doing it on my own, and in the end I decided to go with Legal Zoon, with my $5 online coupon code of course.  It cost me $153 to have them do it, which includes my state filing fees. 

It can take as long as 35 business days to get it all taken care of.  I already received my EIN from the federal gov't, so that's all set.

Im already feeling better and a little more at ease knowing that my assets will soon be protected!  Plus I can write off the filing fee I paid to legal zoom, so all is not lost.

I appreciate everyones advice.

A tax accountant would be a good idea, even if it is a consultation just to explain everything and lay out your options.  Just know that if you do want to be treated as an S-Corp for tax purposes rather than filing on your 1040 Schedule C, you have 2 months and 15 days to make the election.

No problem at all, Justin.  I just want to tell you that you may want to reconsider once you start making enough money to warrant a salary.  As a Sched C filer, everything you net is subject to self-employment taxes, but when you elect S-Corp filing status, you get to take a salary and only that part is subject to payroll taxes.  The net income of an S-Corp is considered a distribution and is never included in the self-employment tax calculation.  Depending on how much you start to make, the savings can be quite considerable. Something to keep in mind, huh? 

This goes for anyone who is still filing a Sched C and making pretty serious money, maybe say $50k net.  Taking a salary to save money on SE taxes and not having to worry about filing estimated taxes can probably help out a lot once you reach that point in the blog's life.

The Penny Hoarder said:

I've started to look into as well. I like the idea of being protected and I'd also like to finally open a business checking account. I like how Crystal pays herself a salary out of her business account every month instead of wondering how much income there will be in a given month. :)

Just to be clear, I am not an LLC.  My Paypal blogging income is transferred to a personal savings account called "Blogging Income" at ING (one of our 8 savings accounts with them along with our checking account).  I pay myself $1650 biweekly out of "Blogging Income" and into "Checking".

I am not an LLC for two reasons.  The first one is that I was told that it would be taxed at a higher rate than a sole proprietorship.  If I make more than $60,000 a year, then it would be a wash, but I'm not quite there yet.  The second reason is that the first reason gives me an excuse to be lazy about it. 

I talked to a tax professional recently, in CA it costs $800 a year to have an LLC, which I think is a lot! The other issue is the hassle of being a business, which can mean payroll and other things you have to do. I'm waiting until the advantages very clearly outweigh the costs.

That's a great example, but actually the maximum amount of federal unemployment tax per employee is $56, so it's pretty negligible, plus both state and federal unemployment taxes are deductible to the business (for what it's worth).  

So that's what you went for the other day, huh?   That guy must have been smoking some of that medicinal stuff.  I don't know the regs for CA, but I find it hard to believe that the annual fee is so high unless he meant the tax return was included in that figure.  

Anyone can find out all of the requirements by searching for their state's Secretary of State or Division of Corporations, and everything should be right there.

I'm not in California, but checked and unless I'm reading it wrong, it seems like there's an annual $800 LLC tax.  Not small change for those living there!

Squirrelers said:

I'm not in California, but checked and unless I'm reading it wrong, it seems like there's an annual $800 LLC tax.  Not small change for those living there!

 

 

You're not wrong; it really is $800 a year.  That's why I haven't done so plus (as I've posted before) two different lawyers told me it really doesn't add much protection to sole proprietorships.