I lived in Utah for a year or two, and decided to register an LLC to start a business doing some freelance software work. The address is at my old home address in Utah (which I still own, just renting it out, netting $200/month). I moved to Tennessee recently and the money is starting to ramp up for me as I've worked the last few years to get more business and have a few contracts signed and completed. It's not big stuff ($12k/yr), but I'm trying to scale my work for greater profits.
Questions:
1. How do I pay myself from the business without getting hammered by taxes? In general, how do I structure finances properly? Do I need a business bank account with my EIN?
For digital businesses like mine, how do I find out deductions and write offs, etc.?
Do I need a registered agent in Utah if I don't want my rental property to be the place of business for the LLC? Should I get a P.O. box? I'm wondering about what the address should be on my LLC entity, as well as signing up for services like credit cards, bank accounts, etc.
Can a CPA handle a lot of this, and do I need one in Utah since the LLC is registered in Utah? Can they handle my small business, as well as my rental property taxes and expenses?
I've done a lot of googling, but not seeming to find the right answers or what kind of professional help I need to get.
Are you a single member llc? If so, taxes are calculated without any bearing on how you took the money to use personally. The IRS sees that money as your money as soon as it's earned. Taxable when earned, and yours to do with as you please after that. The IRS does not care if you have a business account or EIN. The llc is meaningless legally, without separation from you though.
You would look through your bank statements, to find your expenses. You'd keep track of mileage you drive for work, and see if you have a qualifying home office.
Why do you want to form a llc? Why did you decide not to be a sole proprietor instead? You should register the llc in TN, if that is where you'll be running it from. Don't you have an address there in TN?
They can help you with a lot of this, yes. Or help you know what things you need to track. Why would you register the llc in Utah if you don't live or work there?
I am. Gotcha. Is there a single-member-esque legal entity that would be reasonable to form (s-corp) to be able to pay myself as an employee or something?
It was mainly to just make sure that if I got sued for work I did my family wouldn't be hosed. I assumed it was a reasonable way to separate my individual self from the work. Since it's an online/digital business, does it matter where the llc is formed? I do have an address here in TN, but again, I don't want to put my house down for everything business related?
It's in Utah because I Used to live there and that's where I started, and only renewed it to keep my Apple Developer account correct and active, among other things. The renewal fee is also only $18, compared to $300 for TN.
No, not for 12k a year. Running payroll adds cost, and at your income, increases taxes.
Do you plan to have liability and umbrella policy insurance? A llc is very slim protection, if you are the one doing the work. You can still personally be sued for anything that is your action.
Are you operating in TN but not paying the foreign llc fee there?!
And I haven't done any operating yet. But I do have work coming in from different states. So does that count as operating in TN? What the heck is a foreign llc fee? haha
So from your point of view, there's really nothing that I can change here? I'm just stuck doing the same thing?
