Transitioning to an LLC - Any advice or resources? | Help Desk | Yakezie Forums

I'm strongly considering forming an LLC since I own blog and also do consulting work on the side. I'll probably be expanding my business ventures beyond that soon, so it seems like the way to go.

That said, I'm not quite sure how to go about switching over. Another concern of mine is that I'm leaving the state that I live in now in about 6 months time. Does that matter as to the state that I form an LLC in?

Any tips or links would be greatly appreciated!

The location of where you incorporated isn't a major deal for taxes, mostly just for filing and renewal fees.  The key determining factor is where the business is located while earning the income.  If you incorporate in your current state, you can easily keep it registered there and not worry about anything., but you will have to file business income taxes in the state where you move to (if it is a requirement there) once you start doing business there.  Some states have different rules for filing returns for different business structures, so I would check with the Department of State, Division of Corporations, or the Department of Revenue for the new state depending on which office handles incorporation and taxes.

I will add that I used Legal Zoom to form my LLC, I did it a couple months ago, granted it cost me $100, but it only took 5 minutes of my time and they did the rest so it was worth it for me.  They sent me an entire package with all the paperwork when it was done.

I'm planning to form an LLC as well and have more questions.

Tax – I'm confuse here. Let's say I live in CA which has state income tax, but I incorporate in Nevada (no state tax.)

Do I pay the CA income tax? We're on the internet right and my server is in Chicago or something like that.

Is it just where you live?

@ Justin – thanks for the tip! I just looked at Legal Zoom and it sounds worth it to make the process easier rather

@JT – I never heard of SCORE, but I just signed up and it said someone will contact me! Hopefully they can help out.

Post edited 9:10 pm – December 2, 2011 by YourFinancesSimplified

Eric J. Nisall said:

It depends on the physical location of the business.  People incorporate in areas other than their home location because of the cost savings for initial filing and renewals.  The place of incorporation has nothing to do with determining where you report your taxes to, the physical location of the business being done is the key.  If you live in California, and run the sites from California, then you have to file a California return.  

Bingo.. My LLC for my Real estate company is in Nevada, I do business in NY and my home office is in VA.  I still get creamed by NY taxes and foreign LLC crap.  

Thanks everyone for the great advice!

I used Legal Zoom to form a multi-partner LLC. Very simple to do.  If it is just yourself I would not waste the money on a lawyer as it is very simple to setup an LLC.   I do my own taxes and it can be a bit complicated so you will want to hire a CPA if you are not comfortable with the tax aspect of your business.  Don't forget about State and City taxes.  We have to file and pay both State and Local Sales taxes each month in Arizona.  It's all a pain in the arse so if you are going to form an LLC committ to growing the business.  It is not worth it if you are only making a few bucks.