Should you set up an LLC or S Corp for your voice over business?
This is what Karlyn wrote in and asked us.
Disclaimer: Below is my personal opinion. I am not a financial advisor or tax preparer. As with any financial advice, please consult a professional.
My Answer:
I wouldn’t worry about creating an LLC until you start making money from VO.
For the first year or two of my VO business, I set up a separate bank account as a DBA (Doing Business As). Here’s a step by step process of creating a DBA in GA. If you’re in a different state, you’ll need to look up the corresponding process.
You can still write off expenses under a DBA. It’s cheaper and easier to set up than an LLC. It doesn’t protect your assets like an LLC but when you’re starting out, an incident requiring protection is unlikely.
My personal path went from DBA -> LLC -> S-Corp.
When should you become an LLC? When you start making money and think this could be a business versus a hobby. With an LLC, you can do a monthly “guaranteed payment” from your business to personal.
When should you file to become an S-Corp? For an S-Corp, I’d make sure you had a couple years under your belt as an LLC or DBA. You need data to determine an estimate for how much you’ll make each year. You have to do payroll as an S-Corp and that can be more complicated.
With an LLC, you could reconcile your own books and then hire a CPA for taxes. An S-Corp is more complicated and I have someone that does the payroll for me.
Another difference is that you typically have more tax benefits with an S-Corp versus an LLC but my CPA still was able to maximize my deductions as an LLC for a long time.
DOES the BUSINESS SIDE OF VO like this feel overwhelming?
Saundi Harrison-Cooksey is leading a VO business workshop with us in the fall that I think may be beneficial.
Thanks so much for the great questions, Karlyn!
