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As an independent contractor (1099) should I form an LLC? Do…

As an independent contractor...

As an independent contractor (1099) should I form an LLC? Do I need to?

Accountant's Assistant: Can you tell me what state the LLC is registered in?

I don't have an LLC, I'm asking if I should have an LLC as an independent contractor.

Accountant's Assistant: Has anything been officially filed? If so, what?

No, I'm starting this month and I've never been independent before so I don't know what I should or shouldn't do as far as incorporating.

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Answered in 21 minutes by:
10/2/2017
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Tax
Satisfied Customers: 2,775
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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Welcome to Just Answer. My name is ***** ***** I will be able to assist you today.

You don't necessarily need to form a LLC to be an independent contractor. The benefit of forming a LLC is that you will limit your liability as the name suggests Limited Liability Company. Your liability is generally limited to what you put into the company, such as time, money and inventory.

For tax purposes a single member LLC is considered a disregarded entity and therefor taxed as a sole proprietorship.

If you feel the need to limit your liability then you should form an LLC. I suggest waiting to incorporate the LLC until the company is making enough revenue to pay for assistance from an accountant.

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Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Tax
Satisfied Customers: 2,775
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
Verified
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