LLC for a contract?

[Beiruty]

I had been selected to work on a contract, however, the company wants to do it Corp2Corp. All my previous contracts where under 1099.
I need to get a LLC with at least 1 employee (myself). I prefer online based so I can do employee payment and business costs online. Of course, I will need a business checking account (my bank is Bank of America).

Any recommendation?

[i8godzilla]

PM Sent.

[RoyGBiv]

Are you asking how to set up an LLC?

It's really easy to register an LLC with the state...
Here's the LLC Registration form:
MS Word: http://www.sos.state.tx.us/corp/forms/205_boc.doc" onclick="window.open(this.href);return false;
PDF: http://www.sos.state.tx.us/corp/forms/205_boc.pdf" onclick="window.open(this.href);return false;

All forms: http://www.sos.state.tx.us/corp/forms_boc.shtml" onclick="window.open(this.href);return false;

1. Complete the LLC form, print it and mail it with your check to Austin... I think you can do this online now too and pay by credit card....
2. Go online to IRS and apply for an EIN (employer ID)... This is done instantly. Fill out the form and they give you the ID online... You may need to have step 1 completed and your TX registration confirmed..... I forget..
3. I forget whether you can get a TX state tax ID online... I went to a local tax office to get one.. but, seems that everything else is online now.. I'd be surprised if you can't get this online..
4. AFTER you receive your TX registration confirmation and EIN you can open a bank account.

FAQ: http://www.sos.state.tx.us/corp/generalfaqs.shtml" onclick="window.open(this.href);return false;

Simplified steps for starting a business and getting a tax ID from Uncle Sam and Uncle Perry.
http://www.texasonline.com/guide/index.jsp" onclick="window.open(this.href);return false;

[Beiruty]

Thank you guys, I will start the process. I prefer to go with online route. I will get quickbook to manage the finance.

[tacticool]

Remember to increase your rate to cover the franchise tax and other expenses, plus your unbilled time for administrative overhead.

[mrvmax]

Remember to increase your rate to cover the franchise tax and other expenses, plus your unbilled time for administrative overhead.

Until he gets 1 million in gross sales there is no franchise tax.

[The Annoyed Man]

Remember to increase your rate to cover the franchise tax and other expenses, plus your unbilled time for administrative overhead.

Until he gets 1 million in gross sales there is no franchise tax.

That's a relief. I just got my LLC in late January and filled out the Franchise Tax Board's questionnaire in February. My CPA told me I have to start charging sales tax to my hosting clients, which I hadn't been doing. Now I'll have to check with him to see if what you're saying is true, because I sure don't need the hassle of keeping sales tax records.

[mrvmax]

Remember to increase your rate to cover the franchise tax and other expenses, plus your unbilled time for administrative overhead.

Until he gets 1 million in gross sales there is no franchise tax.

That's a relief. I just got my LLC in late January and filled out the Franchise Tax Board's questionnaire in February. My CPA told me I have to start charging sales tax to my hosting clients, which I hadn't been doing. Now I'll have to check with him to see if what you're saying is true, because I sure don't need the hassle of keeping sales tax records.

That was from my CPA, 2010 was my first year of selling guns under my LLC. I get my franchise tax paperwork this month sometime, but until I hit the 1 mill mark there are no taxes for me.

[The Annoyed Man]

Remember to increase your rate to cover the franchise tax and other expenses, plus your unbilled time for administrative overhead.

Until he gets 1 million in gross sales there is no franchise tax.

That's a relief. I just got my LLC in late January and filled out the Franchise Tax Board's questionnaire in February. My CPA told me I have to start charging sales tax to my hosting clients, which I hadn't been doing. Now I'll have to check with him to see if what you're saying is true, because I sure don't need the hassle of keeping sales tax records.

That was from my CPA, 2010 was my first year of selling guns under my LLC. I get my franchise tax paperwork this month sometime, but until I hit the 1 mill mark there are no taxes for me.

But you still have to collect them? Or no? I'm not sure I understand.

[Beiruty]

TX sales taxes are different from Franchise taxes, 0.5% or something like that.

[The Annoyed Man]

TX sales taxes are different from Franchise taxes, 0.5% or something like that.

I don't think so. You pay your sales taxes to the Franchise Tax board. I could be wrong, but then I'm already confused...

[RoyGBiv]

Sales tax needs to be collected and paid to the state from the first penny of taxable sales. Franchise tax is assessed when total revenue exceeds $1M in a year.

Two COMPLETELY different taxes.
Sales tax is a tax on your customers. Franchise tax is a tax on your company.

I am also not a CPA so check with yours for the details as they pertain to you exact situation.

[apostate]

Until he gets 1 million in gross sales there is no franchise tax.

In that case, can someone explain this? http://www.window.state.tx.us/taxinfo/f ... rates.html" onclick="window.open(this.href);return false;
Did they put the fine print on a different web page? (possible, it's the government)

Beiruty,
If you don't mind, could you circle back after everything is settled and give us a summary of the differences in practice between operating as a limited liability company vs. independent contractor (presumably sole proprietorship) paid via 1099. I've had principles of accounting and basic business law, so I understand the theoretical differences between business types, but classes never seem to cover practical issues like the actual paperwork/filings required, the differences (if any) in tax burdens, and quirky stuff like whether you would pay unemployment insurance as the sole member (and sole employee) of an LLC and (if so) can you lay yourself off and collect UI benefits.

Thanks!

[Beiruty]

If the LLC employed myself, and at the end of the contract got laid off, why not? As an employee, one can apply for unemployment benefit. The only thing is just to verify before doing so. I will update when the llc is set up an running.

[Skiprr]

Sales tax needs to be collected and paid to the state from the first penny of taxable sales. Franchise tax is assessed when total revenue exceeds $1M in a year.

Two COMPLETELY different taxes.
Sales tax is a tax on your customers. Franchise tax is a tax on your company.

I am also not a CPA so check with yours for the details as they pertain to you exact situation.

You may not be a CPA, but I think you're spot-on with this.

The only thing I'd add is that the franchise tax needs to be filed even if the $1 million limit isn't met.