
Ask HN: How do you manage your single-member LLC for consulting? - ameesh
Occasionally, I do consulting&#x2F;contract work for various clients. A few years ago, I was advised to set up a single-member LLC with S-corp election so that I could save on self-employment taxes. This saves me thousands of dollars a year in exchange for some amount of paperwork.<p>The paperwork burden isn&#x27;t huge, but it&#x27;s large enough to make me wonder if others have found a better solution. In contrast to a sole-proprietorship, I have to manage the following:<p>- Payroll software to process paychecks (to myself)<p>- Unemployment insurance filings<p>- Annual Franchise tax report<p>- K1 and 1120s<p>- Business bank account<p>What combination of services are others using to manage all of this? I currently use Gusto + TurboTax + manual effort, but it feels like overkill for such a common, simple LLC arrangement.
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philiphodgen
Out of curiosity . . . why an LLC with an S corporation election? Why not a
corporation with an s corporation election?

(Note: I am a tax lawyer and am genuinely curious. I can think of a few
reasons, which are mostly driven by unique local conditions. I routinely tell
California business owners to choose corporations rather than LLCs in this
situation. I am curious about your particular situations and why the choice
made sense for you.)

Also. Sorry to tell you but the overhead you are experiencing is normal. And
it gets worse from here.

Government bureaucracies (in California at least) hate employers and fill
their pockets with rocks and then tell them to go swimming.

Just wait until you are in the swampy zone of 4-5 employees. Too small to pay
someone to make the pain go away, too big to avoid serious brain damage.

But I’m not bitter and I do not judge. (Rolls eyes and walks away muttering to
himself).

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ameesh
I should start by saying I created an LLC solely for my on-the-side
consulting, both for the tax benefits and whatever "corporate veil"
protections it would provide. I'm not planning on ever adding investors or
partners. I really doubt I'd ever have employees either.

From what I've read, the paperwork burden is significantly higher with a
corporation vs an LLC for (AFAIK) no added benefits in my situation.

Based on the many blogs advocating single-member consultancies to work under
an S-Corp, I'd imagine there are many folks out there in an identical
position. I was hoping someone had created a cookie-cutter solution for a
reasonable price.

Shoot me an email if you'd like to discuss this in depth. I'm interested in
easing this burden for others, if possible.

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philiphodgen
S corporation status is good. It can save money on social security tax costs
compared to a regular corporation or self-employment.

Paperwork burden may be slightly lower for an LLC. The LLC eliminates annual
minutes for the Board of Directors and shareholders. Hint: this is, 99.9% of
the time, a template Word document. In about 20 years of me being the sole
shareholder of my own S corporation I have done something else (i.e., minutes
other than these template annual documents) exactly zero times.

I find that people (whether owners or banks or other beings you interact with)
sometimes have a bit of cognitive difficulty with the slight cross-species
aspect of being an LLC but walking like a corporation.

So there you have my opinion. Nothing wrong either way. I favor a small extra
amount of automated paperwork every year over dealing with cognitive
dissonance in strangers’ brains. It’s not decisive but it is my preference.

To go full Reddit, I want a duck, not a horse dressed like a duck. :-)

Both systems work.

It’s what you do afterwards with your company that matters. E.g., what you are
wrestling with right now.

I know of no cookie cutter solutions. Sorry. I manage this for a couple of
people (bookkeeping, payroll, tax returns, etc.) in my firm and it is a
thankless painful job.

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mapster
i use none of the above. sole prop., taxes are easy since I have no empl. or
complex expenses. i do maintain business insurance (~$20/mo). my bank keeps
hounding me to set up a biz account. I'm too lazy. Its easy to find my
deposits and expenses by downloading bank account data as excel.

~~~
gt2
with a sole prop are you not concerned with tax advantages of setting up an
SCorp or LLC with SCorp election? If you are running a business, the tax
benefits have good reason for your risk and rewards being the business owner.

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gt2
Payroll service recommendations anyone?

Seems the big ones (ADP, Wells Fargo) are around 60 per month and it seems
ridiculous for a 1 man show that may only need a single paycheck cut per year.

Is there a better way to handle this?

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kidlogic
I currently have developed a product that handles the paperwork burden for
c-corps, s-corps, llc, non-profts, etc.. imagine a registered agent that has a
much better web interface.

happy to chat in more detail

~~~
ameesh
Interesting - my email is in my profile, send me a note

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briandoll
[https://blog.reifyworks.com/the-business-
stack-2016-edition-...](https://blog.reifyworks.com/the-business-
stack-2016-edition-84d83319a90b)

