Do freelancers need to set up LLCs?
Freelancing is one of the most common ways of making money now. You can work as a freelance full-time or just accept some gigs part-time. No matter what, you might come across the need to figure out whether you should be setting up your business as an LLC or not.
Should freelancers need to set up LLCs?
Yes, the idea of setting up an LLC can be a really good decision that a freelancer can take. That is because it can provide extra protection to personal income as well as business income by doing so. By setting up an LLC, a freelancer will be able to get an employee ID or a tax ID. This would separate the identity of your business from your personal identity. In other words, you can have a checking account separately for your business and build credit under the name of your business. Moreover, you can get a business credit card as well.
How much LLC cost setting up an LLC?
Once you set up your freelancing jobs as LLC, you can expect to receive multiple benefits. Here are some of the most prominent benefits of them.
- You can track your business income separately
By setting up an LLC, you can run separate bank accounts and credit cards under the name of your business. As a result, you will be able to keep your business transactions separate from your personal transactions. For example, you will be able to use a business credit card to pay all business-related expenses. As you continue to do this, you can build business credit.
- You can experience benefits during the tax season
When you set up an LLC, you will be able to save both times as well as money during the tax season. For example, you can use your business bank account for filing business taxes as you have all information there. Moreover, you will find it an easy task to claim all your tax deductions without confusion.
- It provides LLC legal protection
When working with clients, you will have to sign contracts. You will be signing all the contracts under the name of your business. In case something goes wrong as you make a mistake, you will end up with a lawsuit. But when you have LLC, you can make sure that your personal assets are protected from lawsuits. This will help you to keep peace of mind.
- You can make your business look more professional
Do you want to make your freelancing business look more professional and deliver a positive impression to the minds of your clients? Then you should think about making a LLC. For example, you can distribute business cards with the name of your LLC. You can also use the business name when you sign contracts. This will help you to showcase your professionalism to the clients, which will eventually help you with unlocking numerous corporate benefits.
- You will have to pay LLC taxes at the corporate level
The personal income tax will be much higher when compared to corporate-level taxes. By going for an LLC, you will be able to reduce the taxes that you have to pay. This will eventually help you save some extra money.
Final words
Now you are aware of the benefits of registering your freelance business as an LLC. Go for it, and you will be able to experience a variety of benefits that would come on your way.
How to start LLC in American Samoa
Setting up a limited liability company (LLC) in American Samoa can help you establish an independent legal entity for conducting business operations and holding cryptocurrencies such as NFTs. LLCs are available in states, territories, and insular areas such as Puerto Rico and American Samoa. Also known as Limited Liability Companies, LLCs are special entities created under state laws that provide liability protection to owners involved in business activities.