Posted by Loretta Reed on 4/11/07 4:21pm
Msg #184692

To be an LLC or not to be....that is the question....

I was in a 3 hour meeting with my tax preparer today.

I am now up in the air on whether to continue to be an LLC or go to a "trading as" name.
I don't like to pay personal property taxes in MD because I have an LLC along with that $300 check to let them know I have 2 computers and 2 fax machines. I also do not like the 6% tax for being a LLC. What do you all think?

I can file as a trade name and be a sole proprietor or stay an LLC and have the state suck all of my money away.

Reply by Signing_Doc on 4/11/07 6:18pm
Msg #184714

Is there a reason why you haven't incorporated? (either S or C corp). Nevada (and I think NH) are a couple of states where incorporation laws favour the 'little person'. We are incorporated as W2E Inc dba "The Signing Doc". All my information with the ss's are with my corp EIN, and all funds run through my corporation. You do not have to live in NV or the other states in order to incorporate there and you might be surprised at the savings you can incur being a corporation as opposed to an LLC. Both have a usage and both have their own advantage/disadvantage re protection of personal assets in cases of being sued. If you have any questions about how we did it, PM me or at my website and I'll get back to you, or just do a google search for incorporation. (I'm not advertising for any particular company and am not giving legal advice, just my opinion as a person who is incorporated.) So take what I say with a dose of skepticism and check it out for yourself. Anywoo, good luck.

"Doc"

Reply by Loretta Reed on 4/11/07 8:19pm
Msg #184739

I have one friend that says don't be an LLC, just do a "trading as". It saves money, I won't have to pay the MD 6% taxes on my gross income. I have another that says to be incorporated to protect myself from being sued.

I am an LLC right now but want to do what is best for me and my money. I think I will go ahead and hire a lawyer to help me decide.

Reply by John_NorCal on 4/11/07 11:53pm
Msg #184761

Being incorporated or an LLC may or may not help you as far as liability issues but the corporate veil is easy to pierce, especially for a personal service such as notary signing. If you want to be more creative in your retirement planning then you would want to look into a C corp. For the average person, being a sole prop will do just fine rather than worrying about corp or LLC taxes, which in CA are a minimum of $800 per year. As far as incorporating in Nevada, Deleware, etc., if you are in a state that taxes like CA, you won't save anything. You would in fact be paying fees to 2 states, for instance, CA taxes all income that is earned in CA so it doesn't matter where your are incorporated or registered as an LLC. States that have income taxes are catching onto people incorporating in other states to avoid their own state taxes. Talk to a lawyer about the legal protections, then talk to a CPA about the tax consequences. Good luck.