Gil Faver <rowdy'sboss[at]xxyz.com> wrote:

- quote -

I disagree.

Obtaining an EIN is simply obtaining an EIN, and not an
election on how to be taxed.

If a sole proprietorship hires employees it needs an EIN
anyway, without any such election.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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"Gil Faver" <rowdy'sboss[at]xxyz.com> wrote

- quote -

Single member LLC's get a separate TIN.

--
Paul A. Thomas, CPA
Athens, Georgia

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"Gil Faver" <rowdy'sboss[at]xxyz.com> wrote:

- quote -

Even a sole proprietor can get a TIN for his business, so
getting one shouldn't imply any election whatsoever.

Stu

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matt[at]mailinator.com wrote:

- quote -

Just in case anyone isn't aware, I'll mention for the record that this
"incorporate in Delaware" idea is a complete waste of time for any
business that is not publically traded. In other words, if you have a
smallish business and aren't listed on the NY Stock Exchange, don't
bother, it won't get you anything.

The whole "Delaware" thing is based on the fact that Delaware law (and
now Rhode Island and perhaps a couple of other states) have laws that
allow boards of directors to have more control and shareholders less
control than the laws of the other states.

For smaller companies that primarily do business in one state, it
doesn't make a difference. The state where most of the business is
done, or where most of the employees work, is going to impose its rules
even if the corporation is based in Delaware.

Stu

matt[at]mailinator.com wrote:
- quote -


The first question is, why do you "need to incorporate" your sole
proprietorship? From a tax standpoint, a single-member LLC is treated
as if it did not exist as an entity separate from its owner. That
means that you would continue to report the income and expenses of your
business on your individual federal and state income tax returns
(Schedule C). Your net income would also continue to be subject to the
self-employment tax, which is essentially both the employer's and the
employee's halves of the Social Security and Medicare taxes.

Forming an LLC is not incorporating, although it may provide similar
liability limitation. However, if your business gets its income from
the provision of your personal services, you may find that neither LLC
nor corporate structure will save you from liability for your own acts
and omissions. You may need insurance to cover those risks. These are
legal, not tax, issues, and you should discuss them with a qualified
local attorney.

If a lender is balking at making a loan to you as an individual, but is
willing to lend to your single-member LLC or wholly-owned corporation,
that may be a sufficient reason to conduct your business through an
entity that is legally different from yourself as an individual.
However, again, this is a matter you need to discuss with an attorney.

Echoing others: This is not a do-it-yourself project. Get professional
help before you make any decisions. It can save you a lot of money in
the long run.

Katie in San Diego

matt[at]mailinator.com wrote:
- quote -

Why? Have you discussed this with your accountant?

- quote -

No. Moreover, if you form an LLC in Delaware, you will have to
"qualify to do business" in your home state, which usually
carries the same set of fees an incorporation, so you will be
paying two sets of incorporation fees (one to Delaware, another
to your home state) every year.

- quote -

Generally, with an LLC you can elect to pay taxes either as a
partnership or as a corporation. So if you elect to pay taxes
as a partnership, there won't be corporate taxes indeed. This
said, corporate income tax should be the least of your tax
worries. The bulk of your tax liabilities is likely to be payroll
taxes...

- quote -

Your accountant is the best source of information.

Cheers,
NC

- quote -

that may be true regarding only taxes, but the paperwork and
maintenance issue of an LLC are likely less complex than
that of a corporation.

- quote -

the "corporate veil" is not a privacy matter - it is a
matter pertaining to whether the owner(s) of the corporation
may be held personally liable for corporate debts.

with respect to single member LLC privacy, if you have to
give a SSN as your TIN, people with a bit of brains can
figure things out. The way to avoid this is for the LLC to
get its own TIN, which I guess amounts to an election to be
taxed as a corporation. I didn't bother. I have the
"corporate veil", and a bit of privacy, but not full
privacy.

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<matt[at]mailinator.com> wrote

- quote -

LLC laws vary from state to state, so what may apply in one
state may not be the case in another state. If you have a
specific issue in mind, talk to an attorney in your state
who is familiar with LLC laws. It doesn't matter what
state you form your business in, you'll still have to file
(and pay the fees) in the state you operate in (in your case
Louisiana) as well as the state of formation (you're
thinking about Delaware). So all you have done is to create
additional paperwork and more fees to pay by forming in a
state other than the one you will locate your business in.

A single member LLC is treated as a sole-proprietor for tax
purposes, unless you elect to be taxed as a corporation, in
which case it might be wise to just incorporate from the
git-go. Single member LLC's do not provide any tax
advantages over a sole-proprietor.

I doubt any single member LLC's create any level of privacy
(ie: corporate veil), because your clients, suppliers,
vendors, and lenders will most likely know about you - the
person they are dealing with.

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

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<matt[at]mailinator.com> wrote in message
i
- quote -

This savings is exaggerated unless you are making well into six fugures.
The only real savings you will see is avoidance of the "self employment tax"
of about 6%. Ask again if you don't know what that is and I'll explain.

- quote -

Yeah but so what? It is hard to imagine any of us being much of a
liability. You're not driving a Mac Truck, you're writing code (or
installing hard drives or removing a virus). A couple million more dollars
of liability insurance costs nearly nothing in my line of business.

- quote -

There is not enough of a difference to matter.

The bottom line is, don't incorporate unless you have very good reasons for
doing so. It can be a hassle, tax savings may be minimal and the "corporate
veil" may not be as thick as you imagine it to be. Anyone can sue anyone
for anything these days, you know.

Jim
(who is a C-corp but doesn't really need to be)

matt[at]mailinator.com wrote:
- quote -

First, if you form an LLC, you're really not incorporating. An LLC is
not a corporation, though it provides similar liability protection.

- quote -

I'd advise that you talk to a tax lawyer about these issues. You don't
reorganize your business all that often, so it makes sense to me to
spend some money and consult with a qualified professional before you do it.


Bob McAdams
Fambright

In article <8bghj25jsockfrfkg0crg1gehmf82lct3m[at]4ax.com> ,
matt[at]mailinator.com wrote:

- quote -

If you do not live in Delaware, there is an important detail that
these web sites leave out. Any work that you do in your home
state falls under your home state rules, and not the Delaware
rules. Further, in order to legally do work in your home state,
you have to register as a foreign corporation since you are
registered out of a different state. So, you will have to pay
your local fees one way or another, and you will have to pay
all the local taxes on work done in your home state. There
is no free lunch here.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

matt[at]mailinator.com wrote:
- quote -

First, if you form an LLC, you're really not incorporating. An LLC is
not a corporation, though it provides similar liability protection.

- quote -

I'd advise that you talk to a tax lawyer about these issues. You don't
reorganize your business all that often, so it makes sense to me to
spend some money and consult with a qualified professional before you do it.


Bob McAdams
Fambright

hello,

i need to incorporate my sole proprietorship. i was on a "incorporate
in delaware" site today, and i read their FAQs about LLC vs. S-Corp. it
seemed pretty informative, and made me think perhaps LLC was right for
me in my transition.

question -- is the LLC in delaware going to have the same benefits as
the LLC in my (random) state? or do they vary from state to state? i
was primarily interested in the:

- no corporate taxation (as the sole employee, id pay taxes on my
income only)
- stronger corporate veil
- less formalities required

...from here: https://www.delawareinc.com/101/inde...pageid=10068#3.

so i checked my state, LA, and found its way cheaper to file a LLC
myself in just a few days. but it sounds like the LLC details are in
fact specific to the state, and what i read above may not be the same
in LA.


any pointers?

thanks,
matt