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- Jun 23, 2016
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I will chime in, even though I am not a lawyer (not legal advice, seriously don't take legal advice from strangers on the Internet) and it seems to be too late. Possibly for future reading and others benefit. You don't "need" an LLC, but there can be some benefits.
Legal:
If you don't follow the formalities to keep it an LLC, there is no use for it. If you get sued and you haven't followed the formalities (differ by state so I can't comment even on what they are) then there was no point. If you have followed the formalities, and you are in the right state (or formed it in the right state) then you will be seen as 2 separate legal entities. Your LLC explodes on someone, they can only sue the LLC. Someone falls in your house and sues you (once again varies by state) they can't foreclose on your business.
Tax:
If you don't form an LLC you are running business as a Sole Proprietor. This means all your income from your business (in most businesses) is subject to self employment tax. There are ways through changing the way the IRS views your business through an LLC that can reduce self employment cost.
I recommend you read up on both of those things if you are DIY person or speak to a competent professional. If you enjoy reading legalese then have some fun.
EDIT: This isn't Tax advice either. Don't take tax advice from random people on the Internet either.
Legal:
If you don't follow the formalities to keep it an LLC, there is no use for it. If you get sued and you haven't followed the formalities (differ by state so I can't comment even on what they are) then there was no point. If you have followed the formalities, and you are in the right state (or formed it in the right state) then you will be seen as 2 separate legal entities. Your LLC explodes on someone, they can only sue the LLC. Someone falls in your house and sues you (once again varies by state) they can't foreclose on your business.
Tax:
If you don't form an LLC you are running business as a Sole Proprietor. This means all your income from your business (in most businesses) is subject to self employment tax. There are ways through changing the way the IRS views your business through an LLC that can reduce self employment cost.
I recommend you read up on both of those things if you are DIY person or speak to a competent professional. If you enjoy reading legalese then have some fun.
EDIT: This isn't Tax advice either. Don't take tax advice from random people on the Internet either.
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