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California LLC Tax Help?

Opening a single member llc in California - what forms to file?

  • Hi, planning to open a single member llc in California. Please point me to: 1. What forms to file and where to get those forms from. 2. Is there any online site to do it? 3. What are the tax implications? I dont expect to have much income.so want to keep taxes to the lowest. Thanks for your help

  • Answer:

    first thing to consider is that in Calif. if you form an LLC and report as a corp you will have an annual minimum tax of $800 regardless of what you do you can report as a sole proprietor on Sch C but if you choose that there really is no point to going to the expense of forming an LLC, money that is not well spent

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You can do it all online http://www.suncorpfilings.com/default.aspx?content=Incorporate An LLC is a "disregarded entity". This means the IRS does not recognize the type so it has to "elect" how it wants to be treated by the IRS for tax purposes. A single member LLC can elect to file as a Sole Proprietorship (Schedule C on your 1040), a Corporation ("C"/1120 or "S"/1120S) or a Trust (1041, usually for real estate). So, from an income tax perspective, it depends on which you choose. Once you elect this, you cannot change; you would have to dissolve the LLC and form a new one. LLCs do require annual filing with the state of formation, so you may want to reconsider forming one. Do you really need to insulate your personal assets from those of the business entity? If you are not in a risk business where people can get hurt (landscaping for example), then you may just want to open up as a Schedule C/Sole Proprietorship. You can get an EIN (Employer Identification Number) for the business so you don't have to give your social security number to vendors and such.

Herrmann

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