WE'VE MOVED!

We are proud to announce our NEW community destination. Engage with resident experts and fellow entrepreneurs, and learn everything you need to start your business. Check out the new home of StartupNation Community at startupnation.mn.co

Consulting fee through business?

StreetwiseCreativeStreetwiseCreative subscriber Posts: 1
I`m a single member LLC who does a lot of production-type work. I was recently hired by a client for x hours of time-based consultant work (I also do production work for them as well).
Is there any tax advantages/disadvantages to billing for the consultant work as an individual as opposed to billing it through my business? Both sources of income are being tracked through my business, so I`m thinking that it all comes out in the wash at the end of the year, correct? The only difference is that I`ll get two 1099-Income forms from this client instead of one. Am I right?
Thanks

Comments

  • ConsultnowConsultnow subscriber Posts: 1
    Considering that you are an LLC all of the income is passed through to your personal return so in that instance it is pretty much a wash.  However the danger you may want to consider is that by dealing with the same customer both as a sole prop. and and LLC is that if something goes wrong he can argue that you were serving him as a sole prop. therebye effectively diminishing your "LIMITED LIABILITY".
     
    For more information that can be used by companies like yours, check out the blog at www.developmentstyles.com.
     
     
  • VideographyVideography subscriber Posts: 401 Silver Level Member
    I always thought that the purpose of an LLC was to protect the partners in a professional relationship from each other.  A law firm, an accounting firm, etc, could be an LLC so that the actions of one member can`t expose the other members to personal liability that an ordinary partnership would.
    So, a single person LLC is an oxymoron?  No different than a sole-proprietorship?
    Am I wrong?
  • KevDevKevDev subscriber Posts: 5 Member
    Steve:
    It`s my understanding that, considered as taxable entities, there is no difference between single-member LLCs and sole proprietorships.
    But, in other legal matters, there is a difference. Structuring your business as an LLC provides personal liability protection from business debt that a sole proprietorship cannot.
    The usual caveats apply (I`m not an attorney, there are exceptions, etc.).
  • arstringfellowarstringfellow subscriber Posts: 0
    I agree with Consultnow, while your tax liability will essentially come out in the wash; you`ll be paying self-employment taxes either way, I would play it safe and use the safety of your limited liability umbrella.  If you`re looking for a decreased tax liability, I would suggest looking into something like MBO Partners.  I run my consulting business through them and have found that I make out a little better - both time wise and financially.  I know they work with small businesses as well, it might be worth checking into.
  • mahendra07mahendra07 subscriber Posts: 19 Bronze Level Member
    Dear Sir/Ma
    I write to introduce our financial services to you. I am a direct mandate to a Financial Institution who is also known as private lender specialized in the Lease and Sales of Bank / Financial Instruments in the form of Bank Guarantees (BG), Standby Letter of Credit (SBLC), Documentary Letter of Credit (DLC), Letter of Credit (LC), Performance Bonds (PB), Medium Term Notes (MTN) et al with funds is purely earned from private and corporate investment portfolios without criminal origin.
    We offer these from a genuine and certifiable finance company as the provider hence we are able finance your signatory projects and help you enhance your business plan. Furthermore, our financial instrument can be used for the purchase of goods from any manufacturer irrespective of their location. It can also serve as collateral with any bank in the world to secure loans for your project or to activate credit line to finance your business plan.
    Our financial instrument can be invested into High Yield Investment Trading Program {HYITP) or Private Placement Program (PPP). All bank instruments are for lease and/or sale from a genuine and reliable source without broker chain / joker broker story or chauffer driven offer while having your required time frame in mind.
    We specialized in Bank Guarantee {BG}, Standby Letter of Credit {SBLC}, Medium Term Notes {MTN}, Confirmable Bank Draft {CBD} as well as other financial instruments issued from AAA Rated bank such as HSBC Bank Hong Kong, HSBC Bank London, Deutsche Bank AG Frankfurt, Barclays Bank , Standard Chartered Bank and others on lease at the lowest available rates depending on the face value of the instrument needed.
    We will be glad to share our working procedures with you upon request to help us proceed towards closing deals effectively.
    Thank You
    Contact : Mr. Mahendra JainEmail : Jaindrabglease7@gmail.comSkype ID: Jaindra.bglease
Sign In or Register to comment.