Considering forming an LLC
Thu Aug 21, 2008 6:30 am
Hello all,
I have given serious consideration to creating PSP shows for $$. Up till now, I have done many shows - all for free.
In my research, it seemed that the business model that was the most cost effective while maintaining the lowest personal liability was to form an LLC.
The question becomes, is it necessary? Can one do the occasional show (right now I have several customers lined up) and just report it as income under the normal 1040 (I have a standard job)?
Is there a monetary cap that you can work below without forming a business (i.e. profits on side ventures not exceeding $1,000/month - my wife thinks it is below $500/year)?
The idea is to test the market to see if it is strong enough to warrant the annual fees and hassle of forming a business. However, if a legal requirement necessitates some business organization to be formed, I may not wish to pursue this.
Any comments would be greatly appreciated.
KP
I have given serious consideration to creating PSP shows for $$. Up till now, I have done many shows - all for free.
In my research, it seemed that the business model that was the most cost effective while maintaining the lowest personal liability was to form an LLC.
The question becomes, is it necessary? Can one do the occasional show (right now I have several customers lined up) and just report it as income under the normal 1040 (I have a standard job)?
Is there a monetary cap that you can work below without forming a business (i.e. profits on side ventures not exceeding $1,000/month - my wife thinks it is below $500/year)?
The idea is to test the market to see if it is strong enough to warrant the annual fees and hassle of forming a business. However, if a legal requirement necessitates some business organization to be formed, I may not wish to pursue this.
Any comments would be greatly appreciated.
KP
Re: Considering forming an LLC
Thu Aug 21, 2008 8:21 pm
You don't have to form a business at all. However, your district, city, county, or State might have other thoughts. Make sure you get a business license just to be on the safe side. You don't really need to get an LLC. But, since you've done the research, you should know that if something should go wrong, the LLC provides a bit of protection to your personal assets.
There's no business limit relative to profits. However, making a profit in 3 of 5 years lets you take business deductions in your taxes, otherwise it would be considered a hobby and you can't take the deductions. IRS is wanting to be sure you aren't just messing around. There should be a thread on this part somewhere on this forum already. You might want to search for it.
Dale
There's no business limit relative to profits. However, making a profit in 3 of 5 years lets you take business deductions in your taxes, otherwise it would be considered a hobby and you can't take the deductions. IRS is wanting to be sure you aren't just messing around. There should be a thread on this part somewhere on this forum already. You might want to search for it.
Dale
Re: Considering forming an LLC
Wed Sep 10, 2008 6:10 pm
Hi,
For the occasional show, you just need to file a schedule C with your 1040.
Sheldon
For the occasional show, you just need to file a schedule C with your 1040.
Sheldon