Hello Internet friends!
Since I announced that I was fully self-employed (which you can read about here) I have been getting a ton of questions about how I set up my business. Now, I am not a lawyer or an accountant so if you’re looking for legal or tax advice I can’t give you that. But I did file Socially Taylored as LLC on my own so I can help guide you through that process. Setting Socially Taylored up as an LLC was the best business decision I made in terms of my own protection.
As a freelancer it is so important to legitimatize your business for both tax and business operating purposes. Plus, having this done will come with a variety of benefits such as:
In short… it’s a VERY smart decision to legitimately set up your business. And don’t get me wrong… I totally understand why people avoid doing it. When you’re not a lawyer or accountant this process can be very intimidating and overwhelming. So, this blog post will cover the three steps and costs associated with setting up your LLC the right way:
1. Filing for an LLC (in the state of Michigan specifically)
2. Create An Employer Identification Number (EIN) – it’s like a SNN for your biz
3. Open a Business Bank Account
1. Go to the Lara Corporations Online Filing System website here
2. Search and make sure your potential business name is not taken – *this is a very important step
3. Fill out the Domestic Limited Liability Company 700 – Articles of Organization – it’s a $50 fee
1. Go to irs.gov and hit “File” > “Business and Self-Employed” in the top lefthand corner
2. Hit the button that says “Employer ID Number (EIN)”
3. Hit the “Apply for an EIN Online” button
4. Complete & submit the form with your LLC information
1. Once you receive your EIN, take that and the Articles of Organization from filing your LLC to the bank and open a business bank account. You can pick any bank you want, but I’d recommend sticking with the same bank you personally bank with because it’s easier to transfer money to yourself.
2. Apply for a checking account, savings account, and a credit card
3. Talk with an accountant and set aside between 20-30% of your income into your savings account for taxes
And that’s all there is to legitimatizing your LLC! Hopefully it isn’t as intimidating of a process now that I’ve broken it down in steps, but if you’re still confused or having trouble shoot me a DM on Instagram. 😊