I am registered securities broker affiliated with an independent broker/dealer. As such, I operate as an independent contractor
and received a 1099 for all commission and fee income
. Under FINRA laws
, the all commissions and fee income must be paid directly to a licensed individual
, not a corporation.
I am told that some advisors are able to manage their tax liabilities
by forming an LLC
, or S-Corp and “assigning” income and expenses to the company and paying themselves from the company. I’d like help with the following:
1) Should I remain as a sole proprietor
an LLC, or S-Corp? How will my choice impact my income and self-employment
2) Can I assign income and expenses to the LLC/S-Corp? How? Specifically, what do I need to do to make the assignment?
Additionally, I live in Maine and rent office space in New Hampshire. The Broker/Dealer that pays me in Massachusetts. New Hampshire has a Business Profits Tax
(8.5% on “income from conducting business activity within the state
”) and Business Enterprise Tax (.75% for businesses with gross receipts
of $150K). Maine does not. My clients are all around the country, with only a small portion on my income coming from New Hampshire domiciled clients.
1) What state should I form in? NH (office) or Maine (home)?
2) Can I segregate my income received from outside New Hampshire for the purposes of New Hampshire business taxes
? For example, does my income received from clients living in Florida constitute business activity in New Hampshire?
3) Does income received from my broker dealer in Massachusetts constitute business activity in New Hampshire? (I’m assuming my office location means something.)
Here are some links to discussions about this issue:
I’d like an experienced opinion with some actionable steps. Thank you.