Question

When to go from Sole Proprietorship Side Hustle to LLC

Forum|Forum|2 years ago
August 30, 2023
1 reply
0 views

How do you know when its time to convert your sole proprietorship side hustle to an LLC? And then once the LLC is established, is paying estimated Quarterly Taxes required?

Ask the Experts - Self-Employed - Aug 2023

C

chines2

@TBTINT18 It's a good idea to consult with an attorney for legal entity advice. For tax advice regarding entity decisions, it is different for each person and may also depend on state rules. In many cases, an LLC is a common option as there is flexibility with how you are taxed.

Regarding paying that estimated taxes, you have to do that quarterly whether you are a sole proprietor or a disregarded LLC for tax purposes. If you choose to register the LLC entity as an S-Corp or C-Corp, your withholding taxes will take care of the quarterly reporting for you.

[Edited 9-25-24 9:21pm PST]