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Registering as an LLC and paying taxes

by Kyle Stankiewicz
5 replies
Hello Warriors,

I started an article writing service recently and I am thinking about registering as an LLC, but I would like to know if this is the best course of action.

Clients place orders for articles, I have some writers compose the requested articles, I edit/revise them, and the client gets the finished product. With this setup, do I have to consider the writers employees? Or can I classify them as independent contractors/freelancers? Does this setup warrant an LLC?

Also- is paying taxes as simple as filling out a 1099, or is it a W2? I live in Connecticut, and a friend of mine told me I can expect %30 to go to taxes, but I am only seeing %7.5 for CT wherever I look. I suppose I can ask a professional about this.

Thanks for your help.
#llc #paying #registering #taxes
  • Profile picture of the author maxmalini
    Hi,

    Probably your best course of action would be to ask a professional like an accountant or an attorney about incorporating your company and which legal structure would be best for you.

    - Max
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    • Profile picture of the author Tina Golden
      You can file as a sole proprietorship with your individual income tax if you want to - that's what I've done so far. But it is best to at least consult once with an accountant to be sure you've set up your recordkeeping system well.

      You would not fill out a W9 or a 1099 at this point. 1099s are what you file on each one of your writers (or other outsourcers) to show that you did indeed pay that money out (therefore is an expense which lowers your taxable income).

      30% is the average to put aside for taxes. Not sure what you mean by 7.5% as that sounds more like sales tax to me?

      Anyway, that 30% should cover your state income taxes, federal income taxes, social security and FICA, and whatever else. This will depend on the income you make as to whether all that will be necessary, as well.

      Spring for the fee for an hour with a good accountant - it's well worth it and it's deductible, too.
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      • Profile picture of the author fitz10
        Originally Posted by Tina Golden View Post

        You can file as a sole proprietorship with your individual income tax if you want to - that's what I've done so far. But it is best to at least consult once with an accountant to be sure you've set up your recordkeeping system well.
        You can register as a sole proprietorship but if one of your client's sues you or you incur debt you will be responsible. An LLC or S-corp will separate your personal accounts and your business ones. I would speak to a lawyer about this.
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        • Profile picture of the author Tina Golden
          Of course, you could be sued but for a content writer that's a pretty far-fetched scenario.
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  • Profile picture of the author Brian John
    don't know how to answer your questions, but i've read this guy is a WF legal expert (lawyer): View Profile: kindsvater
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