Hello, I am from CA and formed an LLC (as a single member) in Wyoming the beginning of the year (2010). I formed it there since it’s just an online affiliate business. Now it was not until late summer of 2010 that I began working on it and having business activities.
Thus far, I have a registered agent in WY, an EIN (listed as a partnership/multi-member), a bank account setup for WY, and currently one owner. After doing more research, the company that formed my LLC suggests I should elect to have my entity classified as a corporation (form 8832). That way, my personal income tax is separated from my LLC tax (stays away from CA) as a corporate in WY. Is this a good choice as I’m not earning much yet? However, I read that the state of CA will find ou (even if you separate yourself from the business) but if you conduct business while living in CA, you’ll pay the $800 FTB. In that case, was it a good idea to form it in WY? I’m afraid of paying both CA/WY FTB and along with SE txes on my 1040 Schedule C.
But what if I elected to have my WY LLC to be taxed as a corporate (form 8832)? The company I formed the LLC with is believes corporate taxation makes it necessary to have a separate tax return for the LLC.
Or, should I just dissolve the WY LLC and change it to an CA LLC as a sole-proprietorship?
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Single Member Llc Tax As Corp?
Posted on October 6, 2010.
If it’s a single member LLC, why did you get the EIN as multi-member?
Let’s see, if you elect a C corporation with 8832, you’d pay taxes twice. Once as the corporation and once as dividends. You’d also have to figure out how to pay yourself wages.
Personally, I’d never have bothered with an LLC.
my frank opinion? kill any and all LLC’s
you probably will have no real reason for some time to operate anything other than a sole proprietor, the LLC is just that much more involvement, paper work and expense
you might have incorporated in Wyo free but if you operate in Calif. you will have to be registered there and yes, if you are a corp you will have the annual $800 minimum tax regardless of how profitable you are
and yes the LLC is not you, it is an entity all its own, it pays its own way
an LLC can be filed one of three ways, and you need to determine this before the first filing, ie. sole proprietor(Sch C) corp, form 1120 and partnership, 1065