How difficult is it to set up and run an LLC in Massachusetts/New Hampshire? And above all, how difficult is it to file tax returns? Would I need an accountant (CPA) or just a bookkeeper or could I go alone with the aid of some software assuming a low turnover? Maybe I don't really expect anybody to answer in detail but I rather need some suggestions as where to look for info. Any links? Thank you!
I would definitely consider a some type of CPA to handle your books. It might be a bit expensive short-term, but long term, it could save you thousands.
If it's a single member LLC it's a pass through entity, so you just file your normal tax returns (a Schedule C most likely.)
An LLC is easy to set up and you don't need an attorney or CPA to help you out. You can form one here: http://www.corporate.com/ I have been operating an LLC since 2002 and I do all of my taxes myself with the help of Turbo Tax. Schedule C, as mentioned, is one part of the tax form you will become well acquainted with. Also, take a class with SCORE at www.score.org to learn how to launch your business. You can get free advice through them too. Here is something I wrote about SCORE last year: http://thearticlewriter.com/blog/2006/05/09/protecting-your-back-side/
If your business is active and doing decent revenue, hire an accountant. But, for just a small hobby or minimal business (like 50-60k annually), you can do that yourself usually. See if the Secretary of State has a website for the state you are interested in. For instance, Nevada has one and all the forms are there. Use a 3rd party if you rather not deal with it, but forming an LLC is cake.
Thank you guys! It sounds good! I suppose a CPA can be quite expensive, but I could resort to one at least to be safe in the first year while I learn. Still, I feel so much better when I'm in control without having to rely on others in crucial tasks, such as a tax return. I was hoping that Turbo Tax could help a lot, but I must look into this pass-through entity thing, because it would be a single member and in Massachusetts/New Hampshire. Thank you everybody so far! Keep tips and links coming if anyone else has some for me while I check out those links posted above by Matt!
CPA is quite expensive but you MUST have him to set everything up.. It will become more expensive at the end to do everything yourself.. The cost of incorporation, business license, etc is super cheap not more then $200 in total.. but the cosequenses of making mistakes can be come pricy.. So it would be helpful to learn the stuff as soon as you can by yourself.. participation in tax forums would definitely help
Just remember, there's a difference between an accountant and a CPA. The CPA went through a bunch of hoops to get his or her title.
Every state operates differently too. You will have to file an annual report which can run from $50 in some states to I believe it is $800 in California.
You have to file a Statement of Information each year, but the fee is only $20 in California. You also have to pay state taxes on your income (you have to pay Federal taxes as well). In California, the minimum state TAX for an LLC is $800.
Take a look at this, it's a quick read: http://biztaxlaw.about.com/od/businesstaxation/a/passthroughs.htm I think MA is kind of expensive, like $515 for the incorporation fee. Not sure on any fees after that. NH may be better but you should look at it in detail and maybe find some current LLC owners in those states and see what they went through.
Got it! Anyway, 200$ would be fine. I'd rather avoid mistakes at that stage, I agree. Thanks to everybody for the tips and info! I'll join some specific forums to find out more, one I already know apparently!