What are the tax advantages to creating a LLC for my freelance business?

green_pigeon
green_pigeon Member Posts: 2 Newcomer
edited January 15 in Situation & Life Changes

Is there any reason I should create a LLC for my freelancing? Is there a certain amount of money I should be making annually before this makes sense?

I know a lot of people create an LLC when starting a small business, but I don't fully understand why.

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Answers

  • toyotadriver
    toyotadriver Member Posts: 23 Level 5

    The biggest that I know about is that if you're sued an LLC can protect your personal assets, where if you just work under your own name and were sued all your personal assets would be at risk.

  • GeorgeM
    GeorgeM FreeTaxUSA Agent Posts: 64 image
    Hello toyotadriver and green_pigeon:

    Your question/comment involves a legal analysis which would likely include, at a minimum, a review of your specific state rules and regulations for limited liability companies and the structure of your business. Thus, it’s beyond the scope of the type of advice we offer which is limited to general tax questions and help with our software applications. We recommend you consult your personal tax advisor or attorney to help you decide whether an LLC is appropriate for your business.

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