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Loren
Loren, Attorney
Category: Business Law
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Experience:  30 years experience representing clients .
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Hi There! I submitted a 1099-proposal to my previous employer

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Hi There! I submitted a 1099-proposal to my previous employer who has accepted the terms, etc. However they would like for me to incorporate as an LLC. The principal place of business is questionable as I rent virtual office space in Florida. My primary residence is in Illinois. The contract is only valid for one year. Do I incorporate in Florida since my "business" address is there, but then foreign LLC into the state of Illinois?
Thank you for using JustAnswer. I am JudgeLaw and I will do whatever I can to answer your question and provide you excellent service.

I am sorry to hear of your dilemma. I realize how frustrating this is for you, but I believe I have information which you will find helpful.

You need only organize in a state in which you are doing business. Additionally, for the purpose of the IRS a single member LLC is ignored and any income is reported under your own SSN. If you will be doing business in both Illinois and Florida, then it does not really matter where you organize as domestic and where you organize as foreign.

You will still need a registered agent for service in Florida.

However, if you can just use Illinois and list yourself as registered agent and office, it will save you the expense of operating in 2 states.

It is my privilege to assist you. Let me know if you need further information.  I hope I have helped you beyond your expectations in the service I have provided to you.  I am here for you.

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Thank you.

JudgeLaw
Customer: replied 3 years ago.

Thanks for your feedback. Actually, the sole proprietor business I am currently in is virtual administrative support consulting. I rented a virtual office space as I did not want my home address as "public record" in the event someone needed to sue. For single-member LLC purposes, I had planned on filing Form 8832 to be treated as a corporation for tax purposes.


 


With that being said, would my primary residence in the state of Illinois have an affect on the LLC registration and taxation? Illinois has state income tax while the state of Florida does not. I've also heard that it is better to incorporate in Delaware or Nevada due to the small business laws, but wasn't so sure.


 


The fees in Illinois to start a LLC is $500 versus Florida of $125.

Thank you for following up with me.

If you reside in Illinois, you are going to owe Illinois income tax, regardless of where the business is domiciled. The LLC is still a pass through entity.

Florida is cheaper to organize and maintain. if you are not doing business in Illinois then you will not need to register as a foreign LLC in Illinois. it will not save you Illinois taxes, though.

if, for some reason, you wanted, you can organize in Illinois and, for a nominal charge, use a service (I use CT Corporation Systems) for your registered agent and office so that your residence does not show on public records.

I hope this is helpful.

Thank you.

JudgeLaw
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