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The last two years, my accountant has recommended that I form an LLC. As a translator with no desire to have employees and a limited knowledge of business management, I would nod when he said this, then put it at the bottom of a loooong to do list, where I could easily ignore it… until this year.
With the pandemic slowing down my work, I have had more time to reflect on the value of my business. I was reminded that, by offering my professional translation services for money that I use to support myself, I am running a business.
I understand now that an LLC does just what its name says: limits your personal liability. If my business runs into legal problems, LLC status will protect my personal assets, like my car and home. (I like this blog post from Intuit explaining LLCs.)
For me, the water turns murkier when I start looking into S-Corp status. So far, my research tells me that I should check my local tax laws before opting for this status. This is because I may end up paying more in taxes if I my salary isn’t very high. I won’t go farther into discussing this option, since my understanding is extremely limited.
My next step is to contact my accountant and get his opinion. Right now, December 2020, would be the time to set up the LLC, so that it goes into effect on January 1.
If I go ahead with this change, I will share the name of my LLC here. Heck, I may start putting my brand on things like T-shirts and mugs! For now, though, it’s one step at a time.