I have Green's book and he doesn't think so. Trader tax status and MTM are available to sole proprietors so you get those advantages. With an entity, you can do stuff with medical and retirement benefits which in the long run is important if you are a successful trader.
NO you dont. You do not need an office in Delaware, just a registered agent to receive notifications from the State. You can form the entity in DE through a registered agent and they will act as your agent in DE for like $150 a year or so. Almost all major companies are DE companies and they certainly do not have offices in DE. The reason DE is so popular for corporations and LLC is that DE established their judiciary and courts as experts in corporate law and have laws that favor the corporation (i.e. hard to pierce the corporate veil and lower taxes). Thefefore you can set up the LLC (if that is entity you choose) in DE and have main offices elsewhere. Only thing is you have to check with the state you are doing business in to see if you need to register as a foreign entity doing business in that state (foreign meaning not from that state, it does not mean non-U.S.).
I have my home address for some LLCs where I run the business and my partners and I do not have an actual office. The address does not matter and since I do not claim a home office on my tax return I do not have any other issues to deal with. P.S. I am lawyer who dealt with LLCs and C-corps and LLPs so that is where my info comes from.
Thanks for your help. So if I have a Delaware LLC or Corporation, do I need to file a Delaware tax return each year and pay Delaware state taxes on my income, even though I live in Georgia?
Always check with a tax professional but if you earn no income in delaware you only pay the state annual tax on your LLC which is like $200. The LLC files an informational return and all income is passed to its members who include it in their personal tax return. So you will be concerned with Georgia, the LLC pays no income tax as it is a pass-through entity if you choose to have it taxed like a partnership. A c-corp shoudl follow the same steps where it files in its principal place of business. If it is a DE corp but GA is its principal place of business then you would probably file a GA corp tax return (along with federal of course). BUT check with your accountant on the C-corp issue just to be sure.
Coach, Does your LLC have to register to do business in your home state if you trade at home under your LLC? Is your LLC taxed as partnership and can you avoid paying FICA tax?
I was wondering about the social security taxes. I know that you have to pay 15.3% in social security taxes when self employed as a sole proprietor. Is that still the case if I set up an LLC or corporation? This is not for a trading business, but for a medical staffing business.
The tax law on LLCs is flexible. Generally anything REASONABLE goes. If you are actively involved, full-time, doing the day-to-day operations of the Medical Staffing business then, IMO, reasonable might mean most or all of your income should be subject to self-employment taxation. On the other hand, if your earnings come to you based more on the capital invested, rather than your personal services rendered, then the LLC might allow you to avoid some or all of those self-employment taxes.. Not so with a sole-proprietorship. A sole-proprietorship would result in 100% being taxable no matter if it was a result of services or capital...