Working odd handyman jobs, should I establish a LLC now before filing 2019 taxes or wait?

[Natz69]

I have been working odd handyman jobs on the side for the past few years. This is different than my normal full-time job. Should I establish establish a LLC now before filing 2019 taxes OR file now, and then establish one starting in 2020?

Additional Information:
I just realized I received a 1099-Misc from one of my customers which includes material expenses and labor costs that I paid to a friend to help out. I need to figure out how to deduct that...Since the labor payout was over $1,000, I believe I need to provide a 1099-Misc to my friend too. I'm not sure if that changes the path forward.

[ColeenD3]

It is not necessary to have an LLC to be a Sole Proprietor. If you prefer to have one, you still have the choice of being taxed as an SP or as a Corporation. If you choose to be taxed as an SP, then it doesn't matter. Your would file Schedule C as you normally do.

Yes, you would deduct that as a material and contract labor expense. You would need to issue a 1099-Misc to anyone whom you paid more than $600.

You will encounter this question in the interview for your business.

To get to the 1099-Misc:

While in your return, type “1099-misc” in the Search box and then select the “Jump to” link. This will take you directly to the section where you can enter your 1099-MISC. You will encounter these screens.

• Did you get a 1099-MISC?  Yes

• Fill in the "Let's get the info from your 1099-MISC" screen
  • If necessary, check the box "My form has other info in boxes 1-18.
  • You would just report your income on Schedule C as if you had any other profession.

[Natz69]

@ColeenD3 Thank you! Do you know if I will be penalized for using the e-file option to issue my friend a 1099-Misc. via TT Quick Employer Forms page online? I know the original deadline is 1/31.

[RobertG]

The penalty for late filing of forms 1099-MISC is $50 per form if late for 30 days or less and $100 per form if late more than 30 days.

See the IRS website: Information Return Penalties for further information.