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Business Question

March 31, 2019 05:26PM
Last year was the first year I ever made more than $10,000 as an IC. I'm wondering if there is any benefit (tax wise or other) to becoming a LLC or sole proprietor. What do you guys recommend and why ? I have a friend who is also self employed and she says she pays her taxes quarterly. Is this something that is voluntary ? I don't think I'm at a level where I will need to pay taxes because I drive a lot and just realized that my taxable income will be reduced significantly by my unreimbursed mileage. But of course, things could change.

Thanks for any insight or advice.
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March 31, 2019 05:37PM
No tax advantage to changing yo0u status. Quarterly tax payments may be required. When you computer your taxable income and tax amount, you may be referred to a computation that will determine how much quarterly tax you need to pay this year to avoid fines and penalties. Turbo Tax offers this automatically.

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April 02, 2019 01:41AM
As Walesmaven said, there is no tax advantage. You can - and should - deduct the mileage regardless of whether you file as an individual under your SSN or as an LLC. In both cases, you use a Schedule C to report self-employment income. What changes is the name on the form and whether the name is associated with an SSN or an EIN. I actually file a Schedule C under my name and SSN, and another Schedule C under my LLC and EIN.

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April 02, 2019 02:00AM
LLC stands for Limited Liability Corporation. It's structure is designed to do exactly that, limit liability by making the business a separate entity. It has no impact on taxes other than making filing them slight more difficult. There is no need for an LLC as a mystery shopper as there are very few liability concerns. In the few instances there would be a liability concern it wouldn't help you anyway. Let's say you run over someone with your car while you're working (most likely liability concern). If the car was owned by the LLC it would shield you somewhat, but in most instances your LLC would be sued as the owner of the vehicle and you would be sued as the responsible driver. Basically the same as if you did not have an LLC.

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