U.S. CitiesCity-Data Forum Index
Covid-19 Information Page
Go Back   City-Data Forum > General Forums > Economics > Business
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 07-19-2020, 05:51 PM
 
Location: Ohio
1,299 posts, read 1,783,105 times
Reputation: 1779

Advertisements

Greetings!!

Well, I officially ended my job as a paralegal in a law firm back in April after 8 years thus far working in a few firms. For various reasons it was better for me to get out of there and fulfill my dream of owning my own business. I've thought about it long and hard and decided now was the time to do it. Since then, I have started my own solo paralegal business working out of my home office. It took me a while, but I finally have a few clients located in other states (law firms). They send me work, I do it, then send them an invoice.

Since it's taken me a few months to get this rolling and situated, I haven't been paid yet. However, I just sent out my first official invoice for work and will be getting paid here shortly. With the amount of work I'm consistently getting now, I'll HOPEFULLY be able to make this a constant thing (fingers crossed) and make this my livelihood moving forward.

Two Questions:

1. Should I set up anything like an LLC? Would that be beneficial or pointless? For what it's worth, I NEVER plan to grow the business to have employees. It will always remain just me taking on and completing the work. I don't know the best way to go about this. I feel like there's some protection an LLC gives you? Also, when I get paid, should I deposit that into a business bank account then pull money from it into my personal checking account to technically pay myself? Or do I have this all wrong and it doesn't matter?? -- Any advice?

2. Taxes. I DO NOT want to get in trouble with the IRS lol. How do I go about this. I believe quarterly payments, yes? How exactly does that work? Do I do a certain percentage of what I've made thus far in that specific quarter? Also, I assume I need to do the same for local city taxes?

What if I didn't do quarterly taxes, would I just have it all taken at once when I file my taxes?

Obviously, I need some advice here lol.

I realize I should have researched these things a bit more before deciding to venture out on my own, but here we are anyways.

Any help would be greatly appreciated!!!
Rate this post positively Reply With Quote Quick reply to this message

 
Old 07-20-2020, 08:22 AM
 
Location: East of Seattle since 1992, originally from SF Bay Area
32,975 posts, read 60,049,034 times
Reputation: 36333
I had a business for 16 years, with employees and rented commercial/industrial space. I never did the LLC, but just a sole proprietorship. Working from home you have a lot less liability than I did, and the advantage to the LLC is to protect your personal assets in case of a lawsuit.


As for taxes, you would not be penalized the first year if you don't do the quarterly payments or are way off on the amount, after that you would have financial penalties and interest for missing them.


In some states, like ours, you also have to pay monthly State Business & Occupation (B & O) tax, which is based on gross revenue, not profit.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 07-20-2020, 11:23 AM
 
Location: WY
6,022 posts, read 4,191,885 times
Reputation: 7150
Quote:
Originally Posted by gobucks86 View Post
Greetings!!

Well, I officially ended my job as a paralegal in a law firm back in April after 8 years thus far working in a few firms. For various reasons it was better for me to get out of there and fulfill my dream of owning my own business. I've thought about it long and hard and decided now was the time to do it. Since then, I have started my own solo paralegal business working out of my home office. It took me a while, but I finally have a few clients located in other states (law firms). They send me work, I do it, then send them an invoice.

Since it's taken me a few months to get this rolling and situated, I haven't been paid yet. However, I just sent out my first official invoice for work and will be getting paid here shortly. With the amount of work I'm consistently getting now, I'll HOPEFULLY be able to make this a constant thing (fingers crossed) and make this my livelihood moving forward.

Two Questions:

1. Should I set up anything like an LLC? Would that be beneficial or pointless? For what it's worth, I NEVER plan to grow the business to have employees. It will always remain just me taking on and completing the work. I don't know the best way to go about this. I feel like there's some protection an LLC gives you? Also, when I get paid, should I deposit that into a business bank account then pull money from it into my personal checking account to technically pay myself? Or do I have this all wrong and it doesn't matter?? -- Any advice?

2. Taxes. I DO NOT want to get in trouble with the IRS lol. How do I go about this. I believe quarterly payments, yes? How exactly does that work? Do I do a certain percentage of what I've made thus far in that specific quarter? Also, I assume I need to do the same for local city taxes?

What if I didn't do quarterly taxes, would I just have it all taken at once when I file my taxes?

Obviously, I need some advice here lol.

I realize I should have researched these things a bit more before deciding to venture out on my own, but here we are anyways.

Any help would be greatly appreciated!!!
Go talk to a CPA. Yesterday.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 07-20-2020, 11:29 AM
 
21,409 posts, read 5,535,054 times
Reputation: 7546
i would talk to a lawyer and/or accountant
Rate this post positively Reply With Quote Quick reply to this message
 
Old 07-20-2020, 03:13 PM
 
Location: WY
6,022 posts, read 4,191,885 times
Reputation: 7150
Two other options:

1. Set up to meet with someone from the SBA or other small business incubators either through your city/county or local university

2. Contact your state Dept of Revenue directly and ask to meet with someone who works with small businesses in your county/region. Before I opened I had a sit down with the county rep who walked me through when and how to fill out paperwork required by the state.

I do my own books, meet with my accountant a couple of times during tax time, and also once a year so I can pay income tax to the feds.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 07-20-2020, 09:40 PM
 
Location: Western Washington
10,800 posts, read 9,641,658 times
Reputation: 18211
Quote:
Originally Posted by juneaubound View Post
Two other options:

1. Set up to meet with someone from the SBA or other small business incubators either through your city/county or local university

2. Contact your state Dept of Revenue directly and ask to meet with someone who works with small businesses in your county/region. Before I opened I had a sit down with the county rep who walked me through when and how to fill out paperwork required by the state.

I do my own books, meet with my accountant a couple of times during tax time, and also once a year so I can pay income tax to the feds.

^^^^Solid advice. Most counties have Small Business incubators, development districts, etc. The people working there tend to be great resources.

LLC vs Sole proprietorship. It is a paperwork vs risk analysis. With an LLC, the company can hold assets, and if you are ever the loser in a lawsuit, only those assets are at risk, not your personal assets such as your home. In your first years, most creditors are going to want you to sign a personal guarantee on any loans, leases or lines of credit, but once you are established the LLC will have its own credit.

With an LLC, you pay the same tax rates as with a sole proprietorship, as the LLC is a "pass-through" entity.

For a small, one person business, if you operate out of your home and do not manufacture anything, then a sole proprietorship is often a reasonable choice. As a paralegal, I would consider the LLC, because I can envision circumstances where people may sue if legal documents have errors, etc. That is simply a guess on my part, I am not a legal professional, and do not know the risk involved.
Rate this post positively Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics > Business
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2020, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top