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I'm about to start working for myself out of a doctors office. I will basically be renting a room from him so I wont be an employee or anything. Until probably almost September of 2015 I will be working part time due to babies...My question is what, if anything, do I need to do before I set up and get to work? Can I just go in with my license and a credit card scanner and get to work? I know I don't need an establishment license (state regs don't require it if you are single self employed therapist) but should I go ahead and set up an llc and if I do, do I need to do it before I start working or can I just start and worry about the details later? So far I've been working for a Spa so this is all very new territory for me.
Thanks for any and all help I'm licensed in Louisiana if that is helpful.
Do you have an accountant that you trust? That's the most important thing - they will be able to advise you on what is best for your particular situation. There are so many tax issues to take into consideration...My initial thought was to tell you "Yes, absolutely, get one set up right away." But you need to know what is best; with an LLC you will not have direct and unfettered access to the money - it's not yours.
If you do set up an LLC (I have 2), another piece of advice I have is to call the IRS to get your FEI number. If you do it by mail it could take weeks. Over the phone it's minutes.
Your accountant will also be able to help you with the details of filling out the forms for the LLC and what you need to know for the IRS.
The LLC will create a layer of separation between you and your clients in the case of a legal issue.
Also make sure you belong to an organization (I recommend ABMP) that provides liability insurance.
Great answer Therese,
Yes, the main advantage of legally incorporating is the separation between personal and business income and assets. This means that if your business is sued, the party suing cannot come after your personal belongings. It's an asset protection strategy.
Yes you should. In fact, why not an S Corp? Talk to your accountant. You may be in a more tax advantageous position if you opt for an S corp. Reason being is that in an S corp, you can pay yourself a salary and thus deduct it from the business' income as salary expense. The salary you pay yourself is not subject to self employment tax so you will save money there. The more you make, the more you save. You still get the legal entity protection with an S corp, thus keeping your personal and business assets and income separate.
Both of mine are set up as S Corps. I'm not paying myself a salary yet, but it is a real benefit of an S Corp.