When and How to Form an LLC for Your Blog
Being a blogger is a great way to turn your creativity and ideas into an income. If you’re serious about blogging, you might be wondering if starting an official business for your blog, like an LLC, is a good idea. Here’s our take on what you need to consider before making your decision.
What Is an LLC, and How Do I Create One for My Blog?
An LLC is a “Limited Liability Company,” which means it’s a business entity legally separate from you as an individual. As the person who creates an LLC, you effectively own the business and can run your company through it — in this case, that would be your blog. LLCs are designed to be quick and easy to set up and simple to run. You create an LLC by filing specific documents with your state’s secretary of state. You can either do that yourself, or a service like Incfile can do all the paperwork on your behalf, filing and creating your LLC.
What Does Limited Liability Mean? How Will That Affect My Blogging?
“Limited liability” means that your personal assets (like your bank account, property, car, etc.) are kept separate from your business assets, like your business bank account and computer equipment. This mainly matters if your business is sued or required to pay a major penalty. If you have limited liability protection, only the assets in your business will be vulnerable. Without that protection, your personal assets could be vulnerable as well.
In terms of how this affects your blogging, it shouldn’t have any impact at all — unless your blogging might give someone a reason to pursue a case against you. For example, if you provide professional advice that turns out to be incorrect on your blog, and a reader loses money because of it, they may decide to claim damages from you.
Are There Other Areas I Need to Cover If I Start an LLC for My Blog?
Yes. Here are some of the things you’ll need to think about:
- You will need a separate business bank account for your LLC where you will take in money from your blog and pay expenses.
- You should track all of your blog business income and expenses separately through a bookkeeping or accounting system.
- You may need an accountant to help you understand and file your tax returns.
- You may need to file an Annual Report, and there could be a fee to do this.
- You will also need a Registered Agent. You can be your own Registered Agent, or Incfile can provide one for you. If you create an LLC with us, we provide a Registered Agent service for free for the first year.
Can I Pay Less in Taxes If I Run My Blog Through an LLC?
Yes, it’s possible that you might get some tax advantages by having an LLC. One of these advantages is that, depending on how you do your accounting, you only pay taxes on your earnings when you take them out of your business. This could reduce your tax burden in the shorter term, but you will still need to eventually pay those taxes.
Another advantage is that since the Tax Cuts and Jobs Act passed, a portion of the income from your LLC can be classified as “Qualifying Business Income,” meaning you effectively pay around 20 percent less total federal income tax on that amount.
Finally, if you’re earning a good amount of money from your blog, you might choose to file Form 2553 with the IRS and be treated as an S Corporation. This means you won’t pay as much self-employment/payroll tax, which can save you some money each year. Note that this option is best if you’re earning more than around $60,000-$70,00 a year from your blog, since you will need to pay higher accounting fees.
Are There Other Advantages to Having an LLC for My Blog?
Yes, here are some of the other areas you might find useful:
- An LLC can provide you with a more professional image. This can help you be taken more seriously by advertisers, partners, customers and others.
- If you want to open up a separate business bank account, many banks will require you to be a legal business entity to do so.
- Because you’re recording your income and expenses separately and working out your business finances and personal finances independently, that can make it easier to make smart decisions with your money.
- Owning an LLC can make you feel more like a business person or entrepreneur. This can lead you to treat your business in a more professional manner, which could be good for your income streams.
Should I Start an LLC for My Blog Right Now?
It depends. You don’t need to create an LLC right away; you could try blogging as a “sole proprietor” (the default status for a business if you don’t formally create a separate company). If it works out, you can create an LLC later.
When Is It Really Worth Setting up an LLC for My Blog?
It’s best to start an LLC for your blog when you generate some reasonably good income. For example, if you’re earning less than $30,000 a year from your blog, it may not be worth starting an LLC unless you want the liability protection. At this stage, the various fees you need to pay and the taxes you might save could cancel each other out.
But once you start to earn $50,000 a year or more from your blog, an LLC starts to look like a much better choice. You have enough income that you can definitely take advantage of the tax implications, and the simplicity of running an LLC means you won’t have to do too much administration.
It’s Easy to Start an LLC for Your Blog
Here at Incfile, we’re experts in helping you start a blog LLC, and we can make the whole process quick, easy and painless. Here’s what you’ll need to do:
- Gather information on all the owners and members who will want to be part of the LLC
- Search for and choose a unique business name for your blog LLC
- Provide an official address
- Assign a Registered Agent for the LLC
- Fill and file Articles of Organization to officially form your LLC
If you’re ready to start now, or looking to learn more, check out our helpful state-by-state guides to starting up an LLC.