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"What isn't mentioned here is that an LLC is relatively straightforward to set up, an average Hacker News reader could set one up in their state with a few hundred dollars and no lawyer."

This is true but it should also be noted that in some states you can get taxed a significant amount of money per year on your LLC. California, in particular, has an $800 minimum tax per year on LLCs, regardless of whether you've earned a single dime.

$800 a year isn't much if your LLC is an actual money making venture, but is pretty significant if you are just using it for what amount to basically side projects.

California's $800 minimum corporate tax also applies to S-corps and C-corps. Also, to correct a common misconception I often hear (not in your particular post, but in general when I talk about this), registering your corporation in another state does not exempt you from the minimum tax. If you, the corporation's officer(s), live in California, you must register with the state of CA as a foreign corporation (foreign in this instance meaning out-of-state), and pay the $800 minimum tax.

Do not try to get around this--California will hunt you down.


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