A limited liability company (LLC) is a form of business structure that is very popular. A limited liability company allows the owners to have limited liability for the debts and actions of the company. Additionally, the company itself does not pay taxes. The tax liability is upon the owners. Within the state of Wisconsin, you can register for a LLC online with a cost of $130. The Articles of Organization are two page long and ask for a name of the company, the person who will act its “registered agent”, the person (or people) who is organizing the company, the name of the person completing filing, and the business contact. My guess is that in many cases, these roles will be filled by the same person.
So, what are the tax implications? According to the IRS, “The federal government does not recognize an LLC as a classification for federal tax purposes. An LLC business entity must file a corporation, partnership or sole proprietorship tax return.” This means that, more likely than not, you will be filing your tax return the same way you would for sole proprietorship.