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Does anyone have an LLC?

Chrism1330

Chrism1330

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Curious if anyone has an LLC in California. I have a few questions to ask about starting one, been reading some stuff but hoping someone who actually has one and has gone through the process can clarify some questions
 
@popper answered some already but i wanted to know Is it worth starting an llc outside of California due to so many fees? I read that you end up paying more.

Does having an llc really help in terms of saving money when it comes to paying taxes like do i pay less or am i exempt from paying any taxes at all?

What are the real advantages of having an llc when you have some kind of business?

Is it a hassle to maintain an llc or is it as easy as filing regular taxes.

The reason i ask is because i have a little side hustle at work cleaning the work trucks and maintaining them so ive been getting paid separately from my regular hours. I thought starting an llc would help with taxes and since im making a decent amount to cover the $800 yearly fee maybe it helps me with taxes in the long run but i have no clue what im getting myself into really lol
 
Chrism1330 said:
@popper answered some already but i wanted to know Is it worth starting an llc outside of California due to so many fees? I read that you end up paying more.

Does having an llc really help in terms of saving money when it comes to paying taxes like do i pay less or am i exempt from paying any taxes at all?

What are the real advantages of having an llc when you have some kind of business?

Is it a hassle to maintain an llc or is it as easy as filing regular taxes.

The reason i ask is because i have a little side hustle at work cleaning the work trucks and maintaining them so ive been getting paid separately from my regular hours. I thought starting an llc would help with taxes and since im making a decent amount to cover the $800 yearly fee maybe it helps me with taxes in the long run but i have no clue what im getting myself into really lol
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I can’t speak to taxes and such- but my understanding of a llc is more for legal protection in that if the company gets sued -whatever it has in assets is it and it protects your personal assets. Don’t quote me on that though…
 
For a small one-man gig an LLC doesn't offer any tax advantages, only liability protection as @L/B Block said. So it's really up to you do determine the risk and your tolerance of the activity you're doing, and if it's worth paying the extra annual LLC fees and filing requirements. As a single-member LLC, the income passes through to your individual tax return and gets taxed as regular income. You'll get to deduct expenses against the income but you can do that without an LLC as a sole-propretorship anyways.

There are some possible tax strategies if business gets bigger and you elect to get treated as an S-Corp, but that comes with additional administrative burden.
 
CaseyP said:
For a small one-man gig an LLC doesn't offer any tax advantages, only liability protection as @L/B Block said. So it's really up to you do determine the risk and your tolerance of the activity you're doing, and if it's worth paying the extra annual LLC fees and filing requirements. As a single-member LLC, the income passes through to your individual tax return and gets taxed as regular income. You'll get to deduct expenses against the income but you can do that without an LLC as a sole-propretorship anyways.

There are some possible tax strategies if business gets bigger and you elect to get treated as an S-Corp, but that comes with additional administrative burden.
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Thats the answer i was looking for thanks Casey!
 
mainly for limited liability. Your fees also scale with FUTURE income. For example I think the yearly fee is $800 in california. But if income exceeds $250k-$499k you gotta pay an additional $900. And if you go above that $500k - $999k then its $2500. These are all projected income, the llc fees are paid in advance of what your expecting the following year. if you don't make that much and your projection is off, then you get to deduct that amount the following year. Its all kind of a pain in the ass and I would only do it for a couple reasons.

1. Liability protection
2. easier asset transfer

What I mean by asset transfer is that certain investments can be owned by the llc. When selling the asset along with the llc , the selling party won't have to pay tax's again on that item. So if I had a jet owned by the llc and i decide to liquidate, I can set it up so that I just sell the LLC and the buyer wouldn't have to pay the goverment a "use" tax because they wouldn't need to re-register. This would make it easier to sell, and give me possibly a higher return.
 
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