When to Form an entity

[Jamie Parker]

As an wholesaler, when is it smart to decide to form a LLC? Do I wait to build traction in the business or should start one right away. The purpose for this question is due to the tax benefits that may come with an entity. If I were to claim everything I earn as additional income I would be paying more taxes come tax time. I would like to get some clarity and more understanding in this area. Any thoughts?

[David Dachtera]

@Jamie Parker

It rather depends what you expect from the LLC, as Ned said.

As a wholesaler, you're not really holding anything long enough to make a difference. So, asset protection is less important.

What CAN be important, however, is building credit in your LLC's EIN separate from your SSN.

In that case, doing your wholesale business in your LLC brings income into the LLC which helps legitimize it. This can accelerate the process of building credit since you're using the LLC's income rather than "lending" it your personal income to help it establish credit.

Just a thought ...

David J Dachtera