1099 vs LLC - A former client reached out for support on a quick project

From a tax standpoint should I use my dormant, but in good standing, LLC?

Liability here is less of a concern, minimizing tax burden is primary

but if I recall correctly don't most of the writeoff opportunities only apply to S Corps after the 2017 tax overhaul?

I don't see the billing exceeding $15,000, so this is a great side project, but not a significant enough amount of revenue to move tax brackets. Thx!

like
Posting as :
works at
You are currently posting as works at

Tax-wise, there is no difference. As the name indicates, contracting through your LLC gives you greater protection should anything go wrong and you get sued (the business is sued, not you personally). But, either way, you will report this income on your personal tax return and will owe the same amount of tax regardless of your contracting entity.

likesmart

Ignore Independent1. I've had 2 LLCs and can say without hesitation that it is definitely worth it even for 15k.

PROS:
1) You can always keep it active for future projects.
2) In addition to personal liability protection, having an LLC unlocks the ability for business expenses. And lowers your overall tax liability.
3) LLC taxes can be done within your existing 1040 tax return.
4) Theyre cheap and easy to set up. You dont need a lawyer or any of those $500+ websites. Rather just Google to find the appropriate state agency (e.g. department of treasury or taxation). I opened an S-CORP last week in about 10 minutes for $125 direct from my state's .gov website.

CONS:
1) Additional governance paperwork such as filing an annual report with your state ($55 in my state)
2) Some states charge a fee to reinstate or close an LLC if you let it go inactive. I learned this the hard way during COVID.

Related Posts

Can anyone recommend a good fixed income investment that I can add to my ROTH IRA account?

like
like

When (if ever) did you start seeing your drill instructor as a real person who felt compassion for the recruits?

like

Getting out of mandatory learning courses because of my leave of absence! 🙌🏻🙌🏻🙌🏻🙌🏻🙌🏻👏🏻

like

Does ibm give any Diwali gifts?

Hi there. What is considered a good salary for a project manager?

like

That moment when you realize you did not press Ctrl-s and kept working on your excel sheet for hours 💻 📊

And then.. *drumroll*

it effing CRASHES...!!! #FMFL

🤦🏻‍♂️😖😣😡😤😩😫

like

Long does it take to switch from L1B to L1A visa? (Promoted to Manager). Nothing done yet. Any experiences?

like

Do you gotta work on last working week ay ey gds? Just wondering.

likefunny

Do you need my assistance is something we never say. We assert that if you need help ask for it so we can analyze the crap out of you and judge you. Bite me.

like

I’m curious to hear how agencies are structuring their media fees (10%? 15%? 20%!? of spend) Any performance bonus structures? Would love context too. Platforms you’re responsible for? (Fb only? Google & Fb? Emerging platforms?) KPIs? (Awareness/impressions vs. Full funnel d2c) Scope? (Buy and plan vs. Creative AND buying planning). Curious to learn how others’ have evolved their agreements. Thanks in advance for sharing!

like

Hell YEAH!! They JUST approved!!!! Make it rain on Monday!!!

Post Photo
likesmart

St. Regis Mardavall Mallorca Resort - anyone been and worth it?

like

In HCOL areas like NYC, how much would you say is “Too much” credit card debt? Moderate and low amount also. Single , married or any situation.

likefunny

Anyone else think that people on LinkedIn need to remove the sticks in their butts? It's like they'll go posting about industry trends and then at night pound 8 beers and puke on the sidewalk

like

Salaries for NYC Art Directors? Mid level (2-3 years exp). I know there’s an excel sheet but I just need some quick refs, having a comp review tomorrow.

like

Do you guys completed GIP advance training. I am a new joiner and it is a mandatory course..I have gone through the material but it seems many pieces are missing and that's why not able to solve all the assessment questionnaire. Any one have dumps for the latest.please help

likehelpful

Trying to break into advertising, specifically copywriting.

Are there any programs, schools, or courses that I can complete online while also working full time? Thanks!

like
like

Hi Fishes,

I am looking for the job change in ServiceNow profile and having a experience of 4+ yrs.

Currently I am trying to create network in linked in and naukari but still not getting the response from some companies like JP Morgan or mindtree etc.

Can u help me to understand what is the best way to create a network to some major companies.

I know applying directly to the company site mostly doesn't have any benefit or will take long time to schedule the interview.

Additional Posts in Consulting

All I want to do is curl up in bed with hot tea and a good book. Recommendations for if I ever achieve said dream?

like

Honest question here-hw do I work better with Indians who come over frm India(on-site) to client?My patience with them is at an all time low since they jst dnt gt the methodology & hate owning anythng

Any book recommendations on handling office politics?

like

Any of you have a side consulting gig? Something that's too small for your firm to even consider? What are the legal ramifications?

like

Besides for clients, do any of your company's drug test? What would happen if they did?

like

How to deal with being rejected from a consulting job you want?

We've all been there (not just me I hope). It's so frustrating when the consulting one is a tough hill to climb. Has joining a smaller management consulting firm ever worked out for anyone?

I'd like to hope one day I could get into big 4 or even MBB.

like

Bain & Company Which are the best consulting firms and practices for Climate Change & Sustainability, especially in the Canadian geography? Also, please suggest the best Canadian city for consulting jobs.

McKinsey & Company | Boston Consulting Group | Bain & Company | Kearney | LEK | EY | Oliver Wyman | PwC | Deloitte

#ClimateChange #Sustainability #Water #ESG

like
like

How much do you spend on food in a month when you're not traveling? I spend $400 as a single woman and I feel like that's really high.

like

Any idea why EY is not on the list of Vault 50 top consulting firms but it is on the prestigious list?

like

Just got funded at Y combinator with a valuation of $7MM. Would you quit consulting at my age (23) to pursue this idea?

like

Hearing rumors about Huron layoffs. Any deets? Friend of mine said he got the "email".

like

This is gonna be a long 6 hour meeting in a conference room that is like 80 degrees.

like

Starting to get more involved in the project sales process - any recommendations for books or resources to develop skills in this area?

like

Any recs for CIPM study books?

like

Layoffs at Walmart corporate 😬😬

likefunny

Planning to do a PRM or FRM qual. How useful is it to move from Big 4 Risk and reg consulting to industry? Finding it hard to get anything other than non-PM roles

like

New to US. Any recommendations for websites to ship alcohol gifts for year end - wine, scotch etc..?

like

Probably averaging 60hour/week over the past month. I'm not one to complain out loud. It comes with the territory and there will always be rough times. Lately the client has completely changed (contd)

like

Does anyone have any book recommendations that have helped them become a better consultant ?

likehelpfulfunny

New to Fishbowl?

Download the Fishbowl app to
unlock all discussions on Fishbowl.
That was just a preview…
Sign Up to see all discussions
  • Discover what it’s like to work at companies from real professionals
  • Get candid advice from people in your field in a safe space
  • Chat and network with other professionals in your field
Sign up in seconds to unlock all discussions on Fishbowl.

Already a user?
Login here

Share

Embed this post

Copy and paste embed code on your site

Preview

Download the
Fishbowl app

See what’s happening in your industry
from the palm of your hand.

A phone with Fishbowl app

Scan your QR code to download
Fishbowl app on your mobile

Download app

Sign up for free to view this conversation on Fishbowl

By continuing you agree to Terms of Use and Privacy Policy

Already have an account? Log in

Sign up for free to continue using Fishbowl

By continuing you agree to Terms of Use(New) and Privacy Policy(New)
Messaging rates may apply

Already have an account? Log in

For account settings, visit Fishbowl on Desktop Browser or

General

Legal