Washington, Washington D.C. · Member since 2008 · 91 posts · 2 votes
Hi all,
I'm trying to figure out how to build a power team and who should be on it. I think the most important pieces for me right now are an accountant and maybe a RE attorney, but not sure what role each plays. I know that a CPA is the tax expert. What about the RE attorney? Which plays a role in advising on the best legal entity to set up?
I've heard that I should form an LLC, but don't really know how/where to do that. My wife is an attorney, and she said she can set it up (she does banking law, but close enough). However, we're not sure in what state to set it up. We've heard that Delaware and Nevada have the best tax benefits, but not sure if that really applies to us or not. I live in DC, so it's likely, even if I stay local, that I'll do business in MD, VA, and DC.
If I spend money on courses or books or equipment (i.e. laptop), am I able to deduct those expenses from my taxes if I do NOT have an LLC? What if I have an LLC? Could I then deduct those expenses as educational/business expenses?
1. Have your wife do some research in terms of LLCs in various states. For the most part there is no real tax difference. There is the issue of an entity that is not registered in the specific state where you are doing business you will need to register as a foreign entity. In some states that costs the same as just registering there.
2. Some states have better business regulations in terms of privacy or in terms of management structure. Many times the benefits are over blown by the privacy nuts. DE is a business friendly state when you have a large multi-national but I am not sure it matters much for a 1 or 2 person LLC.
3. The liability protection is mostly related to keeping things in different buckets. Your job, your wife's job, the LLC and any children can all cause liability that can legally be separated. If you lose a law suit then the creditors might not be able to grab everything if it is owned by different people and different entities.
Wealth Protection by William Bronchick can be found in many bookstores and on Amazon (under $20.00). It is a great introduction to the topic. Something you and your wife should read.