VO-BB - 20 YEARS OLD!

ccpetersen · Posted: Wed Mar 23, 2011 3:44 pm Post subject:

Hm. They must be jumping in sooner these days. We found out when we went to register with the government for a project and they said, "DO you have a D&B number?" We looked, and sure enough we did -- it was linked to the date of our incorporation. It actually turned out to be pretty useful.
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danbrantley · Posted: Wed Mar 23, 2011 5:33 pm Post subject:

melissa eX · Posted: Wed Mar 23, 2011 5:33 pm Post subject:

I have an LLC. As far as taxes go, it's a pass-through on your personal return. It's all Schedule C stuff - and to be honest - my accountant takes care of it all. But you don't get double-taxed at all - and it's no more difficult than your regular tax return as an independent contractor. A single-member LLC is taxed as a sole-proprietor. It's considered a disregarded entity - unless you choose to be taxed as a Corp. I have separate bank accounts and an EIN - which is huge if you're like me and don't want to hand out your SS# to everyone. But I think you can get an EIN without an LLC or Corp. anyway. I think, not sure.

Companies LOVE it when you're an LLC - Why? They tell me because you're treated as a vendor which makes it easier for them. In some instances it's because they need to jump through corporate hoops in order to 'hire' anyone - even an independent contractor - and as an LLC you're a vendor, not a hire.
Aside from the startup costs (I used my attorney so it cost me more than if I would have done it myself) I pay the state a fee of $50 per year.

You should definitely speak with your accountant - if you use one. They'll be able to tell you exactly how it would apply to your situation

danbrantley · Posted: Wed Mar 23, 2011 5:36 pm Post subject:

ccpetersen · Posted: Wed Mar 23, 2011 6:19 pm Post subject:

Dan,

Yes, I know both houses want to repeal tbat paperwork rule, but the final word hasn't come down yet, as far as I can tell.

The "privacy" afforded by having an EIN is important. I had one as a sole prop. Our corp now has its own, and I simply use it to bill my services out through the corp.
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bransom · DC Joined: 06 Nov 2008 Posts: 650 Location: St. Louis, MO

+1 What Melissa said.

I'm an LLC. Much easier to deal with (less paperwork) than an S-corp that I had before. The LLC, FEIN, liability and workman's comp insurance make it easy for me to pass muster with the biggest, most anal corporate accounting departments.
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Jeffrey Kafer · Posted: Wed Mar 23, 2011 11:04 pm Post subject:

So if you really want protection, you should LLC yourself AND get Error and Ommissions (professional liability) insurance. An LLC is not blanket protection, especially if you've pierced the corporate veil.
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derlor · Joined: 05 Sep 2008 Posts: 20 Location: Los Angeles, CA

Has anybody formed an LLC or S-Corp so that they can qualify for GROUP health insurance coverage for them and their spouse? I'm looking for ways to get insurance for my wife who does not qualify for individual insurance due to pre-existing conditions.

In California there is a state law that says that business groups of 2 or more *have* to be allowed to obtain group health insurance from health insurance companies and employee(s) can't be denied coverage due to preexisting conditions.

The requirements vary between insurance carriers and whether you are a sole-proprietorship, LLC, or S-Corp.

Some carriers require proof that both spouses are actually working 25+ hours per week for that company. Other carriers only ask for a Schedule C with husband and wife's names on it but no proof of how many hours each person is working for the company.

danbrantley · Posted: Thu Mar 24, 2011 5:52 am Post subject:

Gregory Best · Posted: Thu Mar 24, 2011 10:11 am Post subject:

YMMV - in California - you have to pay filling fees and file a number of forms (with fees) to be an LLC. In addition, you must pay a minimum$800/yr income tax for the LLC. From the Secretary of Sate's website:

"Registration of a limited liability company (LLC) with the California Secretary of State (SOS) will obligate an
LLC that is not taxed as a corporation to pay to the Franchise Tax Board (FTB) an annual minimum tax of
$800.00 and a fee based on the annual total income of the entity. The tax and fee are required to be paid for
the taxable year of registration and each taxable year, or part thereof, until a Certificate of Cancellation is filed
with the SOS. (California Revenue and Taxation Code sections 17941 and 17942.) An LLC is not subject to
the taxes and fees imposed by Revenue and Taxation Code sections 17941 and 17942 if the LLC did no
business in California during the taxable year and the taxable year was 15 days or less. (California Revenue
and Taxation Code section 17946.)
An LLC that is taxed as a corporation generally determines its California income under the Corporation Tax
Law commencing with California Revenue and Taxation Code section 23001.
PLEASE NOTE: A domestic nonprofit LLC is a taxable entity and subject to the tax requirements stated above
unless the LLC has applied for tax-exempt status and the FTB determines the LLC qualifies for tax-exempt
status. Therefore, until such a determination is made, a nonprofit LLC must file a return and pay the
associated tax (and, if applicable, the fee) every year until the LLC is formally cancelled. If the LLC intends to
seek tax exempt status:"
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greg@gregorybest.com

derlor · Joined: 05 Sep 2008 Posts: 20 Location: Los Angeles, CA

Thank you, all, for the information about LLCs and health insurance.

One of the carriers in California is more lenient towards showing proof of operating a business, only requiring a Schedule C and an 8-10 week "history" of being in business. It would make much more sense, financially, to stick with being a sole-proprietorship.