Larry Cruz51 said:I’m still having a hard time wrapping my head around why an LLC would be any better than a sole proprietorship, especially when you look at this table below🤷
So, here’s the situation: I have a Master’s degree, and my goal is to launch a service-based business where I hire employees rather than doing all the heavy lifting myself. Based on these figures above, it actually looks like a sole proprietorship might be the smarter play for getting things off the ground
. Granted, I’d need the proper credentials for a sole proprietorship, but since I have someone on my team who has already passed their professional certification for the specific industry we're entering, what's the catch? Is it just those progressive tax brackets🙂?
I’ve been scrolling through all the threads, and I keep seeing people mention that with an LLC, you don't have to register for sales tax until your annual revenue hits $28, whereas with a sole proprietorship, you're hit with it immediately regardless of how much you make. Also, if you go the sole proprietor route, you’re essentially required to be an employee of your own business, while an LLC gives you more flexibility there
. Did I get that right, or does someone need to sit me down and draw me a map to explain this clearly😁
As I understand it, a small business owner is permitted to operate within a single specific field of activity.
If you're operating as an LLC, you have the flexibility to amend your business activities whenever necessary, which essentially means you can simply re-register a new line of business under your existing structure.
People often assume they should just stick to their primary business and wait until they feel ready to expand later on. In reality, when you set up an LLC here in the States, it’s much more efficient to simply register several different business activities right from the start—registering three, five, or even six different lines of business upfront gives you much more peace of mind.
Once again, I am simply sharing my own perspective, and I certainly don't feel the need to be proven right.
Regarding that famous $85,000 figure, I was recently listening to an American news broadcast where they mentioned that if a company manages to pull in those kinds of profits within just six months... $16667 The system is automatically transitioning into the sales tax framework because the current projections suggest that revenue levels will remain steady. 😁.