Hello
I am a programmer and will be doing some consulting work. I am not sure if I should simply bill the companies and expect a 1099, or create a Sole P or LLC. I know NJ has some crazy fees/tax differences than other states with LLC, but if I indeed will have the protection of being sued, I like that. Since I would be the only person in the LLC, I really don't know if a lot of the advantages would apply then.
Thanks in advance for the pointers.
wrote
When you hold yourself out for business, you ~are~ a sole proprietor (aka - self employed). Creating an LLC may have benefits beyond a sole proprietor, but taxes isn't one of them.
Think about this for a sec. You are the person consulting for a fee, you are the one they will sue, this regardless of what entity you form. Talk to an attorney in your state about what liability protection an entity formation gives you from your own personal actions.
They don't provide that much as far as liability and/or taxes. What it does do is give the appearance that the client is dealing with a large organization. "Our consultant is Kadkins Enterprises" sounds better than "Our consultant is Larry".
Remember that you can easily step up the entity, from a sole-proprietor, to an LLC, to a corporation. Making that decision needs to be done in view of all the facts and circumstances along with your plans for the future of that business.
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