If you’ve clicked on this article, chances are that you’ve decided to start a business as a blogger.
If so, congratulations! Turning your passion into a legitimate business is something to be immensely proud of.
To help you in your endeavors, we’ve created a comprehensive guide on how to set up an LLC for bloggers.
Still have a question after reading? You can book a call with our experienced accountants anytime by getting in touch here.
What is an LLC?
Also known as a Limited Liability Company, an LLC is one of the most popular legal corporation structures in the U.S. With an LLC, you benefit from the pass-through tax status of a sole proprietorship or partnership while enjoying the liability protection of a corporation. Setting up an LLC is a popular option amongst bloggers and small business owners because these entities are simple and inexpensive to maintain.
Benefits of an LLC for Bloggers
Setting up an LLC for bloggers has many advantages. More specifically, it can help:
Protect your personal assets
Arguably, one of the most vital advantages of setting up an LLC for bloggers is that you will receive limited liability protection. In other words, you can reduce risk by differentiating between personal and business assets.
If another blogger decides to sue you for plagiarism or trademark infringement – your home, car, savings, and personal bank accounts are protected. Similarly, if your business undergoes commercial bankruptcy, your personal assets are untouchable.
Gain access to tax benefits
Many bloggers set up LLCs because these companies are taxed as pass-through entities. Your LLC is not subjected to taxes; any net income filed is based on your personal tax brackets and self-employment status.
Bloggers with an LLC can typically avoid higher self-employment and income taxes. You can even take tax deductions on any legitimate business expenses you endure, such as the cost of setting up the LLC itself.
Increase your credibility
Lastly, setting up an LLC for bloggers can help increase your credibility. Customers and financial institutions may be more lenient towards working with you when they see you are an official company.
Small businesses in search of loans, grants, and credits, may find it easier to secure financial help when they establish themselves as an LLC. Similarly, the business of blogging relies heavily on trust and reputation. Prospective partners and customers may perceive bloggers with an LLC to be more legitimate.
How to Create an LLC as a Blogger
Forming an LLC as a blogger is a relatively straightforward process; however, it’s worth noting that guidelines will vary in accordance with your state. This being said, all LLCs follow a basic procedure.
- Choose a name
First, you’ll need to choose a name for your LLC. As a blogger, it’s crucial you pick a name that is original yet relevant to your brand and business.
- Designate a registered agent
The registered agent is the person who receives all official and legal documents on behalf of the LLC. It can be yourself, an employee, or an external company.
- File Your LLC Article of Organization
To establish your LLC as a legal entity, you need to file a document known as the Article of Organizations.
- Create an Operating Agreement
Once you receive your LLC certification, you may be required to create an operating agreement, which details the ownership and member duties of your organization.
- Keep Your LLC Active
Finally, you’ll need to keep your LLC active and meet the yearly state-specific requirements.
LLC vs. S Corp for Bloggers
If you’ve been researching LLC for bloggers, you may recognize the term S-Corporation. In short, you can tax your blogging LLC as an S-Corporation or a C-corporation under the IRS.
For tax purposes, business owners who elect the S Corp tax status will be treated as employees. Under these circumstances, they can contribute pre-tax dollars to their 401 (k) and possibly reduce the amount of self-employment taxes due.
In comparison to a C Corp, there’s a substantial amount of paperwork to deal with. You may need to spend more capital on services such as bookkeeping and accounting.
Becoming an S Corp is typically only cost-effective once you reach an annual turnover of $80,000 or more.
So, Should I Register My Blog as an LLC?
The answer is yes!
Registering your business as an LLC comes with many benefits – tax-wise and professionally that you should take advantage of as a Blogger.
Not to mention that it’s relatively easy to do, and something you can achieve in a matter of hours!
Get The Help of an Experienced Blogging Accountant
Setting up an LLC for bloggers and coming to grips with self-employment taxes can be rather confusing, especially when running a one-man show. When you set up a legitimate business, you want to feel confident in all aspects of your decision-making process, especially the financial ones.
Getting the help of an advisor who is experienced with blogging LLCs can help ensure you are paying what’s required in taxes and not a penny more. You’ll gain peace of mind knowing your taxes are filed properly and your personal finances are well-protected.
If you don’t have an experienced accountant for bloggers that you’re happy with, you can get in touch with us anytime by getting started here.
