A certified public accountant (CPA) cannot provide legal advice, but can guide you through the paperwork and decision-making process of setting up an LLC for an average cost of $400-$900 or more, depending on location and complexity. That’s in addition to state fees and expenses.
Who to talk to about forming an LLC?
To help you on your business quest, carve out time to talk with the following five people.
- Your spouse. One of the first people you should talk with about this new venture is your spouse.
- A lawyer.
- An accountant and trusted advisor.
- A business coach or mentor.
- A banker.
Do I need an accountant to set up an LLC?
Most LLCs only need an accountant when they become profitable enough to justify the additional expense of hiring them. Reason I say most is because some LLC owners have a more complicated tax situation. We’ll explore these as well as other key events that should prompt you to consider hiring an accountant.
Is it safe to set up a LLC?
LLCs are great entity structures. But be careful. Don’t set up your LLC until you understand the tax consequences and your options. Ask plenty of questions up front so you can avoid problems down the road. You are better off safe than sorry.
Can a LLC be a s or C corporation?
Not fun. The member of an LLC wanted to file as an S corporation, but actually filed an election to be a C corporation. This resulted in double taxation — taxation at the corporate level and then again as a dividend to him personally. On numerous occasions, clients have made payroll errors as a result of not understanding their entity structure.
Do you need to know taxes for a LLC?
Understanding LLC taxation can be tricky. Get it right and your business is off to a great start. Get it wrong and you could be looking at filing penalties, interest and a stream of letters from the IRS. If you are a new business owner, chances are good that you don’t have a thorough understanding of how LLC taxation works.
