Making 6 figures from affiliates, file taxes with LLC or go Self Employed? (USA)

monkeyjar

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First time trying to file the Self Employed way.. Tax Day has been moved to July 15 this year so I have time to think.. Anyone have some pointers on how to approach this? Thanks in advance.
 

fasttrak

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First time trying to file the Self Employed way.. Tax Day has been moved to July 15 this year so I have time to think.. Anyone have some pointers on how to approach this? Thanks in advance.

I would go LLC personally. You can minimise tax and control your earnings with dividends. This is what I have done in the past.
 

monkeyjar

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I would go LLC personally. You can minimise tax and control your earnings with dividends. This is what I have done in the past.

Thank you.

How fast can I get an LLC? Do you recommend sites like LegalZoom? (I've read LZ is good, but terrible customer service)
 

fasttrak

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You can usually get an off the shelf one in a day or two. I spoke with my accountant and he sorted it all for me in less than 2 days.
 

Glomar

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First time trying to file the Self Employed way.. Tax Day has been moved to July 15 this year so I have time to think.. Anyone have some pointers on how to approach this? Thanks in advance.

I would highly recommend S-Corp status, veryyyy tax friendly
 

taxing

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First, congrats on the six figures!

With that much income, I'd recommend LLC or S-Corp instead of Self-Employed (reported on Schedule C). Here's two things to keep in mind:

1) Yes, you can incorporate in pretty much any state. However, you will very likely still have to register your LLC/Corporation in your home state since you're doing business there. So now there are potentially two state tax returns instead of one.

2) Many people form LLCs or Corporations because they want to avoid self-employment tax as reported on Schedule SE. However, if you're the only owner of the LLC, you'll still have to pay self-employment taxes on Schedule SE. Pretty much same thing for an S Corp (but no Schedule SE) with the big difference is you can deduct the corporate portion of the employment taxes.

Hope this helps!
 

theRevolt

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First time trying to file the Self Employed way.. Tax Day has been moved to July 15 this year so I have time to think.. Anyone have some pointers on how to approach this? Thanks in advance.

Just my opinion, not a tax professional nor lawyer.

- Taxes for single-member LLC and sole proprietor are the exact same, both pay social security. LLC is just a pass-through entity (i leave out the details to get more complex here as you can choose to be taxed as an inc but still form llc, again ask a cpa)
- You should still form an LLC to protect your assets, but that does not work retroactively

In the end, get a CPA if you have no clue, rather than asking advice in a forum, when your ass is the one the IRs will come for.


Thank you.

How fast can I get an LLC? Do you recommend sites like LegalZoom? (I've read LZ is good, but terrible customer service)

I just filed mine online, the same state so was simply and no extra fee needed for these BS services. I'd only invest in a CPA for such advice, just a filing service is wasted money


First, congrats on the six figures!

With that much income, I'd recommend LLC or S-Corp instead of Self-Employed (reported on Schedule C). Here's two things to keep in mind:

1) Yes, you can incorporate in pretty much any state. However, you will very likely still have to register your LLC/Corporation in your home state since you're doing business there. So now there are potentially two state tax returns instead of one.

2) Many people form LLCs or Corporations because they want to avoid self-employment tax as reported on Schedule SE. However, if you're the only owner of the LLC, you'll still have to pay self-employment taxes on Schedule SE. Pretty much same thing for an S Corp (but no Schedule SE) with the big difference is you can deduct the corporate portion of the employment taxes.

Hope this helps!

2) You can do an LLC but elect to be treated like a Scorp, but again I suggest the OP go to talk to a CPA rather than on BHW (unless you read enough so he understands the details and implications)
 
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