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Do you guys start an LLC right away, or do you wait for your business to pick up a little first? (alien.top)

submitted 1 year ago by throwawayissues238@alien.top to c/entrepreneur@indiehackers.space

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Just asking what best practices typically are, because someone told me that I should try to get small but consistent income results before starting an LLC.

I guess this makes sense, since it can cost a little to start and is a lot of work. However, wouldn’t this mean my business’s initial income/expenses would be coming in/out of my personal account, rather than a business bank account?

Don’t most people advise against this?

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[–] SemperFiBroker@alien.top 1 points 1 year ago (2 children)

I agree with the comments, but my experience was I did very well the first year. As a sole proprietor, I got hammered in taxes. I immediately created an LLC (moved to S Corp) and created another single member LLC management company for certain schedule C items. Best thing I’ve ever done is get smart with taxes and hire a good CPA. I learned the hard way. Never again.

[–] zack397241@alien.top 1 points 1 year ago

What kind of business?

[–] blackiconwhitesumo@alien.top 1 points 1 year ago

You only have to worry about taxes once you have the revenue. Getting hammered with tax is a good indicator that you are ready to be Limited.