I can't decide between LLC or SP. If anybody is in CA, can you please share your experiences with me? I'm struggling with the tax issue so I would love any info you can share with me. I think we have to pay $800 minimum in taxes for the year, but I'm wondering if that has to be paid up front? Also, what if I don't make very much or anything at all? I appreciate any insight you can offer me.

~Mariella

Im in CA and what I plan on doing is staying a SP until I get a few clients and can afford to buy the LLC. I plan on buying it in Nevada or Delaware.. Im hoping that the registration agent doesnt make it overly expensive, otherwise I will just do it CA. I do plan on doing it though.

__________________
www.sageva.com
Shelley Halpain,

Be sure to talk to your tax preparer. There is weird taxation of LLCs in CA. It's probably in your best interest to form it in CA not another state. If you're doing business in CA then you have to file taxes for CA. If you are formed in another state you could have tax issues with that state as well. I had a big problem with a tax client in CA who formed a Delaware corporation, cost him a LOT of money.

But, it was a few years ago and I can't remember all the details. I just know that CA sucks. LOL (Sorry, I left three years ago.)

__________________
Lanel Taylor, CVA ~ Virtual Bookkeeper
Taylored Office Solutions
Custom fit solutions for all your office needs.

You are right Lanel, CA sucks for business people. Sometimes I cannot believe all the rules and regulations here, they getcha comin and goin. I was born and raised here... hubby is from Wyoming and we want to move eventually.... decisions decisions.....

__________________
www.sageva.com
Shelley Halpain,

I you're in CA and doing business in CA, then you need to file your LLC in CA, or you will not like the response from the FTB when they find out. They will hit you with tax penalties because if you incorporate out of state but still do business in state... you still have to register with the Secretary of State and pay the minimum tax to the FTB. That's state law. That's why you should just file in CA. Now... some people manage to get away with not registering with the SoS... but others don't.

Personally... I couldn't do it because I'm a Notary Public and the SoS already knows I'm doing business in CA, so if I register out of state and fail to file in-state... I'm in some seriously hot water.

The $800 is a minimum tax for an LLC and needs to paid to the FTB within about 3 months of formation. That can go up if you make more than 250K a year... but I doubt any of us are at that point.

I'm staying a a SP for the time being with plenty of insurance, and may transition later. That's the advice I was given by an accountant... a good business insurance policy that will cover your liability will probably be less than $800 a year and is considered a business expense rather than a tax. He told me that a lot of small businesses in CA should go that way rather than form LLCs, etc. Of course... the state loses tax revenue that way... but really... our taxes in CA are about to double as it is.

__________________
Marian Harmon, Certified Virtual Assistant
www.crossmydesk.com

Originally Posted by lanelt

I just know that CA sucks. LOL (Sorry, I left three years ago.)

Good for you Lanel! I have never lived there, but I've been in an industry that has to deal with CA all of the time. It seams that each year there are more and more rules and laws as to how to do business in that state.

__________________
Derek Brodka
Orion Business Ventures

Same here, talked with our tax person last Friday and he said stay as SP, not take out an TIN (this will throw up flags with the gov't).

__________________
The Doctor's Rx
"The Doctor's Prescription for Success"

Originally Posted by obvusa

Good for you Lanel! I have never lived there, but I've been in an industry that has to deal with CA all of the time. It seams that each year there are more and more rules and laws as to how to do business in that state.

It is stupid how many different ways, the law makers in this state, think of to charge us to live here. Thats what all those laws come down to, revenue. My Mom, all of my Aunts and Uncles and my sister have all moved out of state... nobody is left here cept me!

It never ceases to amaze me what dumb law hits the books next...

__________________
www.sageva.com
Shelley Halpain,