How to Start an LLC in 7 Easy Steps 2024 Guide

do i need an accountant for my llc

Remember that a CPA is also very well paid, and although rates vary, they are typically much higher than an accountant’s. So, weigh your problems with what may happen if you don’t get professional help. Hiring a registered agent service offers a number of benefits, including privacy and peace of mind. If you plan on attracting investors to your small business, an LLC isn’t the best choice. This is because an LLC investor would have to pay taxes on LLC profit regardless of whether or not they were paid a distribution.

Filing taxes as a C corporation

Most LLCs only need an accountant when they become profitable enough to justify the additional expense of hiring them. Particularly when you start your business, having the right guidance on how to budget your money properly will narrate the way you do business as your LLC grows. Long story short, we suggest you have an accountant when forming your LLC, and we’re going to show you how to find the perfect one.

Who can form an LLC?

do i need an accountant for my llc

They can help you with all aspects of accounting including cash flow management, business planning and budgeting, and tax returns for small businesses. Every small business owner gets to the point where they worry about the tax implications of their business, as well as having to handle accounting and other obligations. Trying to juggle these tasks single-handedly can lead to a lot of inefficiency and chaos. For this reason, many opt to hire a certified public accountant (CPA) who can handle these tasks on the behalf of your business.

The Small Business Owner’s (or Employer’s) January 2021 Compliance Calendar

Be prepared to pay a self-employment tax, which as of 2023 is 15.3%. Unlike LLCs, sole proprietors take on all risks and have no liability protection. They also lack the flexibility to choose between operating as a pass-through business entity or as a corporation.

How to start an LLC FAQ

  • Bureau of Labor Statistics (BLS), the median annual wage for accountants and auditors was $77,250 as of 2021, which is more than $30,000 higher than the annual mean wage for all occupations in the country.
  • Regardless of where you form your LLC, you’ll have to pay applicable taxes in the state where you conduct business.
  • However, an individual who holds the position of general counsel in a reporting company is a “senior officer” of that company and is therefore a beneficial owner.
  • Read on to find out how to find a reputable small business accountant.
  • FinCEN’s Small Entity Compliance Guide includes definitions of the exempt entities listed above and a checklist for this exemption (see exemption #22).
  • At this stage, many business owners opt for an online service in order to streamline the LLC formation process and ensure that all documents are correctly submitted.
  • Foreign requests for beneficial ownership information are not yet being processed.

This informs the determination on whether the entity is a reporting company that must report beneficial ownership information. It should not report the corporate entity that acts as an intermediate for the individuals. There are enough unknowns when starting your own business, be sure that your LLC protection has the legal foundation to protect you and your personal assets should risk arise. While an accountant provides invaluable information when it comes to financial matters, consult with an attorney that has experience setting up LLCs, like the team at, when it’s time to determine your business structure.

Frequently Asked Questions About LLCs

While an LLC may not be legally required to have its own physical address, the registered agent appointed by the LLC must have a physical address where important documents, such as legal notices and tax forms, can be received on behalf of the LLC. Most states require that you designate a registered agent, or do i need an accountant for my llc the “agent for service of process,” to handle legal correspondence for your business. Your registered agent may be you, a member of your LLC, or you can outsource the job to a service that will accept documents on your behalf. According to SCORE, registered agent services cost between $100 and $300 per year.

do i need an accountant for my llc

Step 7: Maintain compliance and file required forms

If you’re a small business owner, it’s essential that you follow proper accounting practices to ensure maximum returns for your investments. But an LLC offers a number of advantages, such as protection as an individual from legal and financial problems that your company may face. Be sure to do your research and get legal and tax advice before forming any sort of business. A sole proprietorship is the most simple method of business operation. In this case, an individual engages in business without establishing a formal organization.

Tax basics for limited liability companies (LLCs)

  • State laws may prohibit or restrict the use of certain words in business names, so it’s worth learning the naming rules for your state and any other states where you plan to do business.
  • Each state may use different regulations, you should check with your state if you are interested in starting a Limited Liability Company.
  • Chapter 4.2 (“What do I report if a special reporting rule applies to my company?”) specifically provides details on what information must be reported pursuant to special reporting rules.
  • If you’re unsure what types of permits or licenses your LLC requires, contact your local and/or state government offices for assistance..
  • A subsidiary of a Tribal governmental authority is likewise exempt from BOI reporting requirements if its ownership interests are entirely controlled or wholly owned by the Tribal governmental authority.
  • Some may elect for taxation as a sole proprietorship, but others may be taxed as a corporation.

If you’re dealing with other business hurdles, like managing debt, deciding whether to get a business loan, finding a business bank account, or trying to understand business jargon or compliance, your accountant can help you there, too. Just make sure you’re clear on their fee structure and how much additional consulting may cost if it’s not already included in your package. So, when looking for an accountant, it’s important to know what your biggest pains are and find someone who specializes in that particular part of your business. You can find firms that focus on specific niches, like an accountant for LLCs and small business owners, eCommerce, or B2B services.

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