☰
✕
Sign In

Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
Level 1
posted Aug 30, 2023 11:04:25 AM

Benefits of creating a LLC being self-employed?

Hi! I'll be starting to consult full time soon. Given that I'll be self-employed, I'm wondering if I should consider setting up a LLC, and if so, what the benefits are of doing so? 

 

In addition, could you please explain the quarterly taxes process? 

 

Thanks! 

1 2 792
2 Replies
Employee Tax Expert
Aug 30, 2023 11:14:39 AM

Hi @sf94  Great question!  So remember that LLC's are normally formed at the state level.  If you chose to be  SMLLC, generally it goes right onto your Schedule C.  However, you have the option to pick a different classification if it best suits your business.  Here is a link with the the different classifications:

https://www.irs.gov/businesses/small-businesses-self-employed/llc-filing-as-a-corporation-or-partnership#:~:text=A%20Limited%20Liability%20Company%20(LLC,return%20(a%20disregarded%20entity).

Most people in general, form the LLC for the protection aspect (this is not legal advice).

 

With regards, to your question about quarterly estimated income tax it will depend if you remain a single-member LLC. 

Level 1
Aug 30, 2023 11:20:36 AM

Great, thank you for your help! Since it would be just me freelancing, I think I would fall into the single-member LLC. If I didn't create a LLC, would I still be able to deduct expenses such as rent (I work from home), utilities such as wifi, the purchase of a computer to conduct my work from my taxes? 

 

And for the quarterly taxes, let's say I remain a SMLLC. What would that look like? And I don't create a LLC, would the process of quarterly taxes be different? 

 

Thanks again!