Question:

Should an author form an llc?

15 October, 2021 Tyler Byron 6

Answers (6):

  • AUTHOR: MARGARETT GEDDES
    18 October, 2021

    The benefit of forming an LLC is to divide the profits among people who are willing to work for your company. The bad news is that there are tax implications with this type of ownership structure, which include a share in the profits distributed each year and double taxation because no single person can claim all of the business deductions. As a result, it's not always a good idea if you're compensated by something other than a salary or hourly wage. One exception would be if someone doesn't want their personal assets to be available for creditor law suits. In this case, forming an LLC may be sensible from both financial and safety/security perspectives.

  • AUTHOR: ALEXANDER KAZMIERCZAK
    18 October, 2021

    It can be helpful to form an LLC for those who don't want the tax reporting required as a sole proprietorship. An author should understand that as a sole proprietor, there will be many bookkeeping and reporting obligations like quarterly estimates and business taxes. As a sole proprietor, the author is entitled to only one employee deduction so it's key to have a strong working spouse or partner with income outside of the household. Finally, income from self-employment increases personal tax liability so it's especially important for authors not currently paying Social Security payroll taxes not to leave their employment unprotected by becoming an independent contractor instead of being employed by another company where they would have been guaranteed W-2 protections from Social Security taxation.

  • AUTHOR: TYLER VOLKMAN
    18 October, 2021

    Prior to hiring an accountant, the question one should ask is whether or not they are "self-employed." An llc can shield profits from being taxed at a greater rate. It could be advantageous to have someone else pay for taxes. Readers of this post might be wondering how I know what's in their brain! Taxes are complex and it's important for authors who want to get started by forming LLCs themselves to consult with an experienced accountant before taking action.

  • AUTHOR: LAINE MOTSINGER
    18 October, 2021

    "In most cases, an author may form a single-member LLC for simpler bookkeeping and to create a separation between their business and personal finances.". An llc would help organize the author's finances with the publishing company, specifically if the author is going through a traditional publishing company they hired to publish his/her work. An llc will create a separation of business from the personal finances of the individual person. It can then be used as part of financial planning for potential future earnings from any related intellectual property that is created in relation to that literary work produced by an author.

  • AUTHOR: SAMUEL CENTER
    18 October, 2021

    You should form an LLC if you are serious about running your writing as a business. Even if your publishing goals are modest, you still need to be mindful of what it means to establish the credibility of the "business" with people like editors and publishers. You may even want to hire someone on contract at some point! If you decide not to form an LLC, that's alright too; but also be up front about this with prospective clients -- you don't want them thinking there is more opportunity for professional collaboration than is really there (and they might pass on working with you!).

  • AUTHOR: WALTER BADON
    18 October, 2021

    People frequently have the misconception that LLC stands for "Limited Liability Company." The letters don't actually stand for anything, and can be replaced with any other two letters. For example the letter R could be replaced with P or F, to represent Prolimit Distribution LTD or Proflex Manufacturing Limited. Though it is possible to own an LLC outside of the United States it has become a popular choice in recent years. Priorities are given to those who see their company as being long-standing rather than short term because Corporations are generally associated with profits concentrated on shareholders; LLCs emphasize more of a partnership where members will receive fair gains throughout the duration of their company's success. Geary, Jennifer A.