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    snee2u's Avatar
    snee2u Posts: 2, Reputation: 1
    New Member
    		  
    #1

    Jul 14, 2009, 11:16 AM
    Does opening LLC helps in tax savings on 1099
    HI,

    I am into software industry working as software consultant in CA.

    I am working as an independent contractor. I get my 1099 from my company where I work.

    My question is that If I open an LLC, does it help in saving taxes on 1099? How difficult is opening an LLC? What kind of tax savings I can make with an LLC on 1099?

    Your quick response is really appreciated.

    Regards,
    Snee2u
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Jul 15, 2009, 10:32 AM
    The LLC is a legal entity designed to be a "poor man's corporation", and is NOT a tax entity. Most LLCs continue to be taxed as a sole proprietorship, which means there are no savings.

    Your best option for tax savings is using the subchapter-S corporation, but only if your income is somewhat high (in the $250K range).
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