Q: I get paid as a web developer with 1099. If I form a LLC, does that help me to pay less tax ?
A: Forming an LLC in California as a web developer may provide some tax advantages, such as potential deductions and business expense write-offs. However, it won't necessarily reduce your overall tax liability. California LLCs are subject to an annual franchise tax, and as the owner, you would still be responsible for self-employment taxes on your income. An LLC can choose to be taxed as an S corporation, which might result in tax savings if you can justify paying yourself a reasonable salary while taking the remainder of your income as a distribution, which is not subject to self-employment tax. It's important to conduct a careful analysis or consult with a tax professional or attorney who can advise you based on your specific situation, considering all the potential benefits and obligations that come with an LLC.
1 user found this answer helpful
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
