Starting an LLC: Where to begin?

Anonymous · 2003-10-06T15:46:17+00:00

I was wondering how much it actually costs to register a business name? Is the fee the same everywhere, or does it vary depending on which city you're in? Also…

mellowfox56 Active Member

94 messages
joined Mar 2012

#481 · May 6, 2009

Anthony Chavez6 said:Yes, I had assumed that was the case. Currently, I am on maternity leave as a small business owner, and—to be perfectly honest—I cannot say that the regulations for mothers running their own businesses are particularly favorable. Essentially, instead of my income being calculated as an average of my actual earnings (you know, total revenue minus expenses) over the last six months, Medicare treats my "salary" as whatever the monthly base for contribution calculations happens to be. In my specific situation, that amount is $12933, which means after they subtract taxes and withholdings, I end up receiving $967. 👎

The part that truly frustrates me—it’s almost a systemic flaw—is that I didn't have any real way to increase that base amount by voluntarily paying higher contributions; instead, the amount is strictly mandated by the IRS. When I reached out to ask if there were any workarounds, the suggestion I received was to perhaps put more into a 401(k)☕.

Anyway, I don't want to turn this into an OT—that's a whole different saga for a separate document—so thank you once again for the help. 👍

Honestly, that sounds like total nonsense. Who told you that? You need cash in your pocket right now while you're on maternity leave, not decades from now when you retire. Sure, an IRA is a solid move, but the issue is that those funds aren't really accessible until you hit retirement age, unless there's some specific clause in your contract after a certain number of years.
I can't believe people working in those roles are so out of touch with how real life actually works.
Besides, you're already getting maternity benefits now. Back in the day, small business owners wouldn't get anything at all—it might be a little, but it's definitely better than nothing.

Anthony Chavez6 Member

26 messages
joined Apr 2009

#482 · May 7, 2009

mellowfox56 said:Honestly, that sounds like total nonsense. Who told you that? You need cash in your pocket right now while you're on maternity leave, not decades from now when you retire. Sure, an IRA is a solid move, but the issue is that those funds aren't really accessible until you hit retirement age, unless there's some specific clause in your contract after a certain number of years.
I can't believe people working in those roles are so out of touch with how real life actually works.
Besides, you're already getting maternity benefits now. Back in the day, small business owners wouldn't get anything at all—it might be a little, but it's definitely better than nothing.

😲😲😲I always say that at this point, nothing in America can truly catch me off guard—yet somehow, there is always something new that manages to pull it off...

Regarding the monthly base income—I actually got that information directly from my contact over at the IRS. To be perfectly honest, I don't even have the energy to argue with her anymore; it is quite frankly terrifying how little she seems to grasp about her own profession.

Are you suggesting that I, even operating as a small business owner, have the option to voluntarily increase my base income? Of course not right now—but if I decide to return to working as a freelancer (though, in all likelihood, I will transition into forming an LLC)

mellowfox56 Active Member

94 messages
joined Mar 2012

#483 · May 7, 2009

Anthony Chavez6 said:😲😲😲I always say that at this point, nothing in America can truly catch me off guard—yet somehow, there is always something new that manages to pull it off...

Regarding the monthly base income—I actually got that information directly from my contact over at the IRS. To be perfectly honest, I don't even have the energy to argue with her anymore; it is quite frankly terrifying how little she seems to grasp about her own profession.

Are you suggesting that I, even operating as a small business owner, have the option to voluntarily increase my base income? Of course not right now—but if I decide to return to working as a freelancer (though, in all likelihood, I will transition into forming an LLC)

Yeah, 🙂
You can actually opt for a higher base.
If a small business owner doesn't want to stick to the bare minimum required coverage, they can pick from six different higher tiers. In the US, these levels are usually calculated as multiples of the average gross salary.
You just file the request with your local IRS office.
I still need to double-check one thing, though—it seems pretty obvious that freelancers on a flat tax wouldn't bother with this, but I guess I'm not 100% sure.

brisktinker15 Member

47 messages
joined Feb 2012

#484 · May 8, 2009

mellowfox56, maybe this isn't even the right place to ask, but I'm curious: what actually counts as a "foundation" in accounting—specifically when looking at KPIs for small business owners (excluding sales tax)? Right now, I’ve been putting the invoice number from my receipts under credits and the number on the invoices I issue under debits, but am I totally tripping here?

mellowfox56 Active Member

94 messages
joined Mar 2012

#485 · May 8, 2009

brisktinker15 Asks:
mellowfox56, this might be a bit out of left field, but I’ve been wondering: what actually counts as the "foundation" of bookkeeping—specifically when looking at KPIs for small business owners (excluding sales tax)? Right now, when I log income, I’m just inputting the invoice number from the document, and for expenses, I’m recording the invoice number I issued myself. Am I doing this right?

Look, that foundation document is really just a tool for bookkeeping when you've got a bunch of different entries to deal with. You don't even need to worry about it because you’re going to be logging every single paid invoice individually based on the actual payment date. Basically, once you've settled an expense, you just pick your category—whether you paid cash, sent it via wire transfer, or if it was an out-of-pocket reimbursement. It’s much simpler that way.
Look, if you go in there and sign off on some kind of compensation package, it basically means you’ve struck a deal. It's like you're saying, "Okay, I owe you this much, but you owe me that much," and you just settle up by clearing out those outstanding balances. You're essentially closing out the books by offsetting what's owed on both sides.
Look, you aren't supposed to be logging the invoice you issued—you need to enter the actual receipt. Which one did you get paid for? So, on that specific date, your outgoing invoice basically matches up against whatever incoming payments you’ve actually received. It could even be part of a larger bill. To be more precise, someone might pay off one of your invoices in two separate installments—like if they sent half on the 15th.$1.75 I'm 31.$1.75 You’re going to end up including those dates in the receivables, too.
You can grab a physical ledger at a place like Staples if you want to keep things simple, though that might feel like overkill for what you need. Honestly, it’s probably easier just to build your own in Excel. Just set up a header that says "FOUNDATION [Number]" and the Date, then create columns for: No., Description, Debit, and Credit. It’s super straightforward and way more flexible.
You can basically plug in your daily promises for the whole week in a row, add them all up, and then just pop that total into the KPI along with the foundation date. If you set the foundation date, the system will automatically treat the last day of that week as your deadline. Honestly, though? If I were you, I’d stick to updating those KPIs on a daily basis. It keeps everything much cleaner.
Let me know if I missed anything.☕

brisktinker15 Member

47 messages
joined Feb 2012

#486 · May 8, 2009

Thanks a ton! 👍

So, I’m a little tripped up by how this one author explained things—either she totally missed the mark or I'm just completely misreading her.

Is it cool if I just leave that "foundation" column blank in the KPI, since I'm following your lead and just logging everything—both paid and billed invoices—based on when the cash actually moves?

Basically, I'll just stick any unpaid outgoing or incoming stuff over in the accounts payable list.

mellowfox56 Active Member

94 messages
joined Mar 2012

#487 · May 8, 2009

brisktinker15 said:Thanks a ton! 👍

So, I’m a little tripped up by how this one author explained things—either she totally missed the mark or I'm just completely misreading her.

Is it cool if I just leave that "foundation" column blank in the KPI, since I'm following your lead and just logging everything—both paid and billed invoices—based on when the cash actually moves?

Basically, I'll just stick any unpaid outgoing or incoming stuff over in the accounts payable list.

Wait, what are you even talking about?
Look, you don't put the foundation entries directly into the KPI column. The foundation is its own separate, blank document where you list out individual line items (of the same type), and then you just record the total sum in the KPI.
I'm telling you, you don't need to overcomplicate it—just forget that extra step and log everything on a daily basis in the KPI.

silverbison293 Active Member

94 messages
joined Feb 2009

#488 · May 8, 2009

mellowfox56 says:
The foundation is nothing more than a document used for recording changes.

document, paper, scrap... 😍

brisktinker15 Member

47 messages
joined Feb 2012

#489 · May 10, 2009

Thanks, mellowfox56!

"TO" = I'm talking about the list of requirements and obligations.

mellowfox56 Active Member

94 messages
joined Mar 2012

#490 · May 10, 2009

brisktinker15 said:Thanks, mellowfox56!

"TO" = I'm talking about the list of requirements and obligations.

Sorry I didn't circle back sooner, but do you use some kind of software for that, or are you just tracking everything manually? I mean, regarding those assets and liabilities—how do you actually manage them?

Kimberly Nguyen Regular

543 messages
joined Jul 2009

#491 · May 11, 2009

I really feel the need to bring everyone's attention back to the IMPORTANT - FORUM RULES - UPDATED section. Specifically, I’m talking about the QUOTE guidelines. Honestly, looking at how this thread has spiraled, if people actually bothered to follow the rules and used the quote function properly, we wouldn't be staring down twice as many pages as we already have. It’s exhausting.

brisktinker15 Member

47 messages
joined Feb 2012

#492 · May 11, 2009

I just keep this list manually, since it usually only eats up a couple of pages over an entire fiscal year

mellowfox56 Active Member

94 messages
joined Mar 2012

#493 · May 11, 2009

If you grab a dedicated software package designed for small business owners, you'll be able to pull all those reports and lists without any hassle.

Jose Stewart3 Member

12 messages
joined May 2009

#494 · May 25, 2009

Hey there.
Not totally sure if this is the right thread for this, but I couldn't find a better spot to dump these questions. I'm looking into setting up an LLC and was wondering about a few things:
1. If the founder isn't acting as the manager and happens to be unemployed, are they still on the hook for any payroll taxes, Social Security, or health insurance contributions?
2. If there are two managers/board members who are both currently out of work, but one of them doesn't actually have the authority to sign for the company, do they both still have to pay those mandatory taxes, or is it just the one with the signing authority?

I haven't been able to get a straight answer from anyone yet. 🤷
Thanks!

mellowfox56 Active Member

94 messages
joined Mar 2012

#495 · May 25, 2009

1. It’s pretty likely the founder/CEO is actually working somewhere else and paying their taxes there. In this setup, they’re just acting as the owner, so if they’re already covered under another payroll, they aren't being taxed through this specific entity.
2. You can't have two CEOs—there's only ever one head of the company—but you can definitely have multiple board members.
Just wanted to add that an LLC can totally operate without having any official employees on the books.

silverbison293 Active Member

94 messages
joined Feb 2009

#496 · May 25, 2009

You can actually serve as a proxy—essentially acting as an authorized representative—without being an official employee or having to deal with payroll taxes. It works provided you have a director who carries the legal responsibility... and that director doesn't even need to be on the company rolls if they already hold a position elsewhere, just like what mellowfox56 was pointing out...

mellowfox56 Active Member

94 messages
joined Mar 2012

#497 · May 25, 2009

Ugh, finally! I was starting to lose my mind here. Come on, Dubois, "pop in" already—I was honestly starting to think you’d given up on this forum for good.

Jose Stewart3 Member

12 messages
joined May 2009

#498 · May 25, 2009

mellowfox56 said:1. It’s pretty likely the founder/CEO is actually working somewhere else and paying their taxes there. In this setup, they’re just acting as the owner, so if they’re already covered under another payroll, they aren't being taxed through this specific entity.
2. You can't have two CEOs—there's only ever one head of the company—but you can definitely have multiple board members.
Just wanted to add that an LLC can totally operate without having any official employees on the books.

Wait, how can there not be two directors? 🤷 I was actually just looking through some business filings for a company where both the husband (who started the thing) and his wife are listed as directors, with authority to sign independently or together.
So, I guess I don't really get it. 🤷

silverbison293 Active Member

94 messages
joined Feb 2009

#499 · May 26, 2009

Joanna,
what you witnessed were just board members acting as individual representatives for the company—separately, rather than as a single unit!

Jose Stewart3 Member

12 messages
joined May 2009

#500 · May 26, 2009

I guess both roles are listed as director. 🤷
So, basically, you just pay payroll taxes for one director if they aren't actually doing anything, but you don't have to bother with the second director or board member even if they're totally idle?
If the company doesn't strictly need an employee on paper, I wonder if it works like a small sole proprietorship in the States, where maybe a family member helps out behind the scenes without being officially on the books?

Starting an LLC: Where to begin?

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