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I was told by a business owner that is is more beneficial for me to open an LLC and then work my real estate business under the LLC instead of working 1099. Do you know if that is true? And would you happen to know why?
AI accountant’s answer:
Great question! Working 1099 doesn't apply to just sole proprietors. Any non-corporation will receive a 1099 if at least $600 is earned in a year. For taxes, working as a sole proprietor is not much different than working as an LLC, especially if you are the only owner of the LLC. However, operating as an LLC affords you some legal protections not available to sole proprietors.
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Answer
Great question! Working 1099 doesn't apply to just sole proprietors. Any non-corporation will receive a 1099 if at least $600 is earned in a year. For taxes, working as a sole proprietor is not much different than working as an LLC, especially if you are the only owner of the LLC. However, operating as an LLC affords you some legal protections not available to sole proprietors.
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Melissa Pedigo, CPA
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