Yes, you can file an LLC yourself without hiring a professional service. The main steps are: choose a unique name, appoint a registered agent, file the Articles of Organization, obtain an EIN, and open a business bank account. The time and fees depend on your state.
Understanding LLC Profits
How do LLCs make money? As the owner of a single-member LLC, you don’t get paid a salary. Rather, all profits and losses pass through to your personal tax return.
Key Considerations Before Forming an LLC
What do I need to know before forming an LLC? Key things you need to know are: choose a business name and entity, understand tax implications, comply with state rules, obtain licenses and permits, create an operating agreement, and arrange accounting and financing.
Can I hire overseas employees? Yes, you can hire employees from other countries. Their salaries would be considered business expenses.
What happens if I don’t make money? If your LLC doesn’t earn income, you may not owe taxes. But states require fees and the IRS may still require a tax return. After 3-5 years without profits, the IRS may see your LLC as a hobby, not a for-profit business.
Cost of Starting an LLC
How much does starting an LLC cost? The main expense is usually the state formation fee, which ranges from $40-$500 depending on the state. Additional costs can include legal fees, registered agents, licenses, permits, etc.
LLC Formation Costs in New Jersey
The filing fee to register a New Jersey LLC is $125. The cost to submit an annual report is $75. Professional RA services charge from $49 to $300 per year.
The Certificate of Formation formally establishes your LLC in New Jersey. You can file this certificate with the Division of Revenue and Enterprise Services either online, by mail, or in person.
An experienced businessman always calculates income and expenses beforehand.
Costs Breakdown for New Jersey LLC
Quick Summary Cost to Start an LLC in New Jersey:
- LLC Formation Filing Fee ($130/Online – $125/Mail – Mandatory)
- Registered Agent Service Fee ($80-$300 – Optional)
- Name Reservation Fee ($50 – Optional)
After Approval Expenses:
- Filing Fee ($125 to file the Certificate of Formation)
- Registered Agent Fee
- Operating Agreement
- Licensing & Permits
- Annual Reports
Our guide below will simplify the process and walk you through the associated costs:
- Filing Fees ($125)
- Registered Agent Fees
- Annual Report Fee ($75)
Tax Considerations for LLCs
The IRS treats one-member LLCs as sole proprietorships for tax purposes. The LLC itself does not pay taxes and does not have to file a return with the IRS. As the sole owner of your LLC, you must report all profits or losses of the LLC on Schedule C and submit it with your 1040 tax return.
What if I don’t make money with my LLC? If your net business income was zero or less, you may not need to pay taxes. The IRS may still require you to file a return, however.
States charge an initial formation fee for an LLC.
The IRS will only allow you to claim losses on your business for three out of five tax years.