Resident Agents of Nevada

If you’re not familiar with the term Single Member LLC–what it means is that you have set up and LLC (preferably in Nevada) and under IRS rules you do not “check the box” the indicate that you want to be taxed as a corporation–the default is automatically to a “disregarded entity” and all of the income, expenses and losses are reported on the single members individual tax return. Of course–all of this “single member” discussion is predicated on the fact that there is not partner(s) involved. It can be pretty nice to have all of the advantages of having an entity–but not having to file a separate return. UNLESS, you are operating your LLC in a State with no income tax (like Nevada) and then filing your personal return in a State where there is a State income tax–like California. So, what’s your option if you live in a State with ridiculous State Income tax rates and you want to operate an LLC.

Simple, there is an option to “check the box” on a Form 8832 for Entity Classification and that allows your single member LLC to be taxes as if it were a corporation. This works great if you have retained profits and want to retain the earnings at a corporate tax rate instead of an individual tax rate.

The real importance of the Single Member LLC discussion is that if you are a one man/woman band running a company–you’ll want to have one to avoid personal liability in addition to all of the other advantages of having an entity.

You should call our company today and we can discuss what would be best for you. The only thing it will cost you is your time–and, if an LLC is what you need, you’ll want to get it set up right away so that you can write off the set up costs in 2007.

Sandy, 775 882-4641, Resident Agents of Nevada

agents@nevada.org, http://www.nevada.org