Michael Rude, Financial Advisor
You didn't mention what state you're located in. In California, a single member LLC will have to file a form 568 and pay a minimum of $800 in tax each year. For federal purposes, a single member LLC reports income and expenses on a schedule C, the same as a sole proprietor. Depending on what type of business you're in, you may be want to remain a sole proprietor and pay for sufficient E & O insurance to cover any potential hazards of litigation. Consult a tax professional and insurance professional as needed.
Craig Smalley, Tax Professional
Because we live in a litigious society, it is always better to be an LLC over sole proprietorship. As an LLC, you can pay tax as a sole proprietorship. This is known as disregarded entity for tax purposes.
Craig W. Smalley, E.A. – Admitted To Practice Before The Internal Revenue Service
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