So I’ve got some awesome clients now, and more coming down the pipe. That means I’ve got a bit of money coming in, and need to keep everything in order and get ready for growth.
If you’re running a small business and are taking in revenue, you want to take a few easy steps to keep the IRS off your back, and to simplify your finances. The WSJ has a good post on how and why to form an LLC. I’m going to show you how to do it quickly and on the cheap without hiring a lawyer.
1. Form an LLC in your state
There are a variety of sites that walk you through the steps of forming an LLC. They offer cheap LLC registration, and then try get you to sign up for additional junk like leather binders and stock certificates.
I used www.quickcorps.com and signed up for their “Professional” package. It cost $35 + VT’s LLC filing fee of $125.
Use yourself as the registered agent, this is just an address where you’ll receive tax info and forms from the state. Don’t sign up for “Registered Agent Services”, they just forward mail for you.
2. Getting an EIN
You also don’t need the service to prepare your EIN, you can do it yourself for free. Once you get your LLC docs in the mail, you can file for your EIN on the IRS website. You’ll get it immediately.
Get your EIN Here <– Look for “APPLY ONLINE NOW”
3. Set up a business bank account with your EIN.
Don’t use the bank where you keep your personal accounts. If the business goes south and goes into debt, you don’t want the bank taking your personal funds to cover the losses.
Put all your revenue from your business into this account. Make all purchases for your business from this account. Don’t mix your personal and business finances. Now that you’re running an LLC, you only get taxed on your income after expenses.