Choosing a cookie-cutter LLC puts you at risk for protecting your personal assets. If you are an older person, your LLC will look different than a younger person’s. If your spouse has a W-2, you might choose a different LLC than someone with only a 1099. That’s why specific information for your unique situation is more valuable than signing up for an online LLC.
Bob Bluhm is one of the nation’s leading asset protection lawyers, and he’s helped people from all over the world grow their wealth more quickly and more securely. He’s represented Fortune 500 companies and written several articles about asset protection. Today he answers my questions on some of the tax benefits, pitfalls, and common fee structures for LLCs.
An LLC may not be the best fit, depending on where you’re investing or how you’re investing. There are about sixteen different types of LLC, so what kind do you need? Maybe the better question is, how would you like to be taxed? Bob explains some of the different ways to reduce your tax burden so that you can keep more of your hard-earned money.
Bob cautions that the online services only ask for the bare minimum information, and every one of those questions will have a consequence. You really have to define what the business is going to be about, and then choose an appropriate LLC. There are some drawbacks to choosing sole proprietors or by partnering off and on with other investors.
A few other things you should be aware of: It’s really a good idea to have a multi-member LLC. Only 5 states recognize single-member LLCs, and the other states either don’t recognize them or are in the process of recognizing them. Working with an attorney to create an airtight LLC that protects your specific business is a great way to safeguard your real estate business.
- It’s always cheaper to do it right the first time.
- How LLCs can protect your assets and reduce your tax burdens.
- Bob encourages business owners to be their own registered agent.
- Which type of LLC has a much higher risk of an IRS audit?
- What happens when someone sues you or your business?
- Bringing in a partner means you need to amend your LLC or start a new one.
- Fees you should be aware of when creating your LLC.