Has anyone else done this? I would love to hear from hair stylist or other people who are self employed.
Thank you!I am a self employed hair stylist in NC. I've been doing my taxes myself but recently had CPA Tax guy help.
I'd ask him to explain how that will save you money. That doesn't sound right to me. Forming an LLC is done to shield your personal assets (home, bank accounts, investments, cars, etc.) from liability for what your business does. It won't save you anything in taxes and depending upon how it is set up can actually cost you more in taxes and filing fees than a sole proprietorship will.
Ask him to explain in detail how this is going to save you money. Personally I think he's blowing smoke, possibly to drive up his billings. That's unethical if that's the case.I am a self employed hair stylist in NC. I've been doing my taxes myself but recently had CPA Tax guy help.
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If you are a single owner, the IRS is going to tax the LLC exactly the same as your sole proprietorship. You will still file Schedule C and pay SS and Medicare self-employment taxes. Obviously, that doesn't save you on your federal income taxes, and may cause you to pay higher state taxes.
If he is suggesting you incorporate, that may result in lower taxes depending on your other income and how you finance equipment purchases.
So, you need specific information on how it would save you money. Have him show you last year's tax return re-done with you as an LLC.
I think you need to ask him for more details. Off the top of my head, I cannot see how it is possible. However, I do not know all of your particular details. The same benefits are available you as a self employed person as a LLC. Incorporation could probably benefit you but that will depend on income and what fringes you can set up.
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