Subscribe
Share
Share
Embed
So you’ve landed a steady retainer client, your pottery side hustle is picking up steam, or someone just told you, “You need an LLC.” But do you really—at least for taxes? In this episode, Anastasia and Myiesha unpack the money side of choosing a business structure, leaving the legal stuff to the lawyers and focusing on what actually hits your tax return.
Let’s Get Fiscal is the money podcast for creative entrepreneurs who want to keep more of what they earn and grow their business with confidence. Hosted by CPA and tax strategist Anastasia, each episode makes taxes, bookkeeping, and money management simple, practical, and even fun. We cover topics like tax deductions, small business finances, creative business strategies, and how to avoid costly mistakes—without boring jargon. Whether you’re a filmmaker, designer, artist, or small business owner, you’ll get actionable tips, real-world examples, and a few laughs along the way. If you want to stress less about money and focus more on doing what you love, this is the podcast for you.
Thinking of starting an LLC? These are some of the questions you should be asking in order to set yourself up for success.
Anastasia Aiello:If your business makes money, the numbers are already telling a story. The question is whether that story is helping you grow or quietly costing you.
Myiesha Fisher:Welcome to Lets Get Fiscal, the show for creative business owners and entrepreneurs who want taxes, cash flow, and business decisions to finally make sense. I'm Anastasia Aiello, and I'm Myiesha Fisher
Anastasia Aiello:from Coterie Tax. Each episode, we break down real money questions for business owners and creatives. From how to start a business to tax planning, payroll, wealth strategy, and the decisions that matter when your business is making 7 figures. Our goal
Myiesha Fisher:is to make the money side of the business feel less confusing, more strategic, and a lot less scary, so you can make
Anastasia Aiello:better decisions before tax season forces you to. Let's get fiscal. Hey. Welcome back. Thank you.
Anastasia Aiello:Was Way too much. I know we haven't filming in But Yeah.
Myiesha Fisher:Why you always tell me to put more into it. Hello, everyone. Hey, everybody. We are back.
Myiesha Fisher:It won't seem like we took a break to you because of how we did the episodes, but it has been a hot minute since we've been in these chairs, and I think this might be the first time we've been in these chairs. So welcome. What are we gonna talk about today?
Anastasia Aiello:I was thinking kind of going a little bit more back to basics of do you create an LLC? Oh, yeah. Kind of stay a sole proprietor. Mhmm. And really, what does an LLC mean from a tax standpoint?
Anastasia Aiello:Because obviously, there's other legal implications and all of that fun stuff, and that's what lawyers are for. A whole other job. That ain't us. They went to a different school, all that fun stuff. So we don't wanna be any part of that.
Anastasia Aiello:Mhmm. Because you said if I became added any more letters to my You do. I have a whole alphabet already. So Yeah. We'll just stick to the tax side of So when kind of clients come to you and they're talking about tax strategies Mhmm.
Anastasia Aiello:I think a lot of the question is, am I at the point where I need to create a business Yeah. Or not? Exactly. Does that really mean from the tax standpoint? Mhmm.
Anastasia Aiello:So I guess you wanna talk about more about what that looks like? I'm gonna let you know. Yeah. I know. Okay.
Myiesha Fisher:Okay. Yeah. So when clients like guys, I also know things occasionally. So, when clients come
Myiesha Fisher:to me and they're asking these questions, I usually then say, hey, that is a great question to ask. And then I usually ask them questions to kind of see where are they at of, what what all are you trying to do, and then what is really the end goal as well of, like, are you trying to make this into a bigger thing? Are you just trying to like, separate it out? Are you ready to quit your job? Like, where are you at in the process of like, does it make sense to then create like your business?
Anastasia Aiello:So you're really looking for longevity
Myiesha Fisher:Yeah.
Anastasia Aiello:And how serious they are.
Myiesha Fisher:Exactly. Just because, like, it's not very hard to make the business, but closing it, it's just there's more steps and things. So it's like, how how serious are you? What are your ending goals? And does it make sense right now to do it?
Anastasia Aiello:Right. Yeah. Right. Because in in California, there's that $800 franchise Exactly. That you have to pay.
Anastasia Aiello:Right. Every single year, you have to file your statement of information, you have to file a return with the city of LA. Mhmm. Even if you have a single member LLC that's not doing too much and you're still able to, you know, hobble along using Excel or something like that, which, you know, we don't really don't really recommend. But, you know, there's still a lot of costs associated with opening a business and maintaining a business Yep.
Anastasia Aiello:Just on the compliance and operational side Mhmm. That if you can get to the same place without having to pay all of those extra costs, then sometimes that makes, you know Yeah. So sense. Mhmm.
Myiesha Fisher:Mhmm. So, yeah. So a lot of times it's when they're coming to me and they're like, hey, I just signed on this client, like, they're going to be paying me this amount of money per month, like, I think I need to separate out myself so they're paying towards a business versus like paying towards me directly. And that is kind of when I'm like, okay, you have something where you're gonna have someone on a retainer or, like, things like that, where I'm like, okay, that might make more sense then, and, how much you're gonna actually, like, get that too
Anastasia Aiello:also plays into the employee versus independent contractor question. Yeah. Because especially the California Department of Employment is gonna be really strict. They're strict. So if a company is paying an individual directly on a retainer fee, then that becomes a risk factor for the other business Mhmm.
Anastasia Aiello:Because they open themselves up to audits and penalties and all kinds of fun things with the So that's also some of the requirement in order to have a retainer client that you are going to be working with regularly, delivering projects, all of that. You know, the EDD is going to wanna be able to see that they are not your primary client Mhmm. That you are advertising elsewhere, that you are providing all of the materials, that you are running a standalone business that they are contracting with versus an employee where, again, they kind of control you a little bit more, they provide the supplies, they are your main source of income. Yep. So especially in California, that misclassification, you know, just ensuring that you have that proper classification of your employment type is gonna be pretty important.
Anastasia Aiello:And the LLC helps give your client, you know, that that paying business a little bit more, protection there. It's not I mean, they can still kinda see through that. If you Yeah. If you only create create an an LLC LLC to only work for this one client so that they can pay you $10.99, the EDD is gonna see through that, and they're gonna reclassify you as an employee. They're really going to look for other aspects to show that you are operating a stand alone business that is outside of that relationship Mhmm.
Anastasia Aiello:Without one client. So
Myiesha Fisher:Yeah. Just being careful. Mhmm. And we've also had people come to us where they're like, they won't pay me unless I am a business, so I need to, like, get this going in order to do those things. So we are seeing that come happening as well where people are getting more businesses are getting more careful because they don't wanna get in trouble with ADD because it's an ache and a half.
Myiesha Fisher:See, that's the right phrase. I said that phrase right.
Myiesha Fisher:Hey. I think it is a real one.
Myiesha Fisher:But yeah. So I yeah. That's definitely a thing that we're seeing pop up more often, especially in California because there's such sticklers about what is that classification. Mhmm. So yeah.
Myiesha Fisher:So when they come to us and they're doing those things, do you wanna talk about some of the other tax implications of, like, making their business and they and then making that LLC and what that
Anastasia Aiello:kind of looks like? I mean, from a single member LLC, it's going to be treated exactly like a sole proprietor. Gotcha. Yep. So tax wise and tax strategy wise Mhmm.
Anastasia Aiello:It's not going to be too different. Mhmm. Obviously, in California so on the federal level, everything is still filed all the same on the same piece of paper, whether it's a sole proprietor or a single member LLC. In the state of California, they are going to require an additional form five sixty eight, the LLC return Mhmm. Along with your personal return.
Anastasia Aiello:So we see that missing quite a bit where, you know, especially if people say in California, you know, I I created an LLC and it didn't have any income or expenses. Well, on the federal level, normally, we don't need to file anything. We don't have to do anything. But in the state of California, because that is that minimum $800 franchise tax fee, you do have to self report that there's no income because the LLC fees are based on how much income you have. So you have to report that they're zero, so then you are only paying the minimum amount.
Anastasia Aiello:Because if you're making, you know, a few 100,000, then that you could owe the 800 plus 900, then you owe 800 plus 2,500. So California is still requires that form to be filed even if there's no income and expenses. And so sometimes that's what's missed when people are, you know, tax preparers are filing from out of state or what have you. Mhmm. And then three years down the line, you Yep.
Anastasia Aiello:We can see now.
Myiesha Fisher:They're just like, hey, you never did this thing.
Anastasia Aiello:Uh-huh. Yeah. And even if you pay the fee when you're supposed to, you still have to reconcile that fee back to the tax return in some way, and it's a whole thing. So but that's kind of the whole point is creating an LLC is extra paperwork, and it is going to be costly, and it does have just a lot more management Yeah. Of the entity itself.
Anastasia Aiello:Because we have to remember, you know, even if we just take the basic concepts of a c corporation where it's a completely separate entity from you Mhmm. It is a completely different person, so you have to take care of it. You have to feed it. You have to, you know, like, look after it, all of that fun stuff. So a lot of it comes into play when we're looking at, like you said, what are your objectives?
Anastasia Aiello:Yeah. What are the requirements that you're running into in order to operate this business? And do these additional responsibilities and costs outweigh, you know Mhmm. You know, do the benefits outweigh those additional costs that it will take to operate it? So, every state is gonna be a little bit different.
Anastasia Aiello:I mean, like I tell people in the state of Arizona, it's like $75, and you never have to do anything again. So the barrier is very low. Same with New York. You know, New York is relatively simple. There's every two years you file something, and it costs $5.
Anastasia Aiello:Yep. You know? So there's a lot of other states that have a lower barrier to entry, so that's when you see people that have 50 LLCs. And I mean, even that, like Yeah. It requires entity planning
Myiesha Fisher:Yes.
Anastasia Aiello:For sure. Which is a whole separate service. But in the state of California, because you do have a little bit of that hump, you know, of that $800 fee, you have to file a return for it. You have that annual, you know, statement of information and everything.
Myiesha Fisher:Make sure that's all done
Anastasia Aiello:here. That comes into play, then you kinda gotta say, okay, what is this actually useful for? Mhmm. Because if you say, okay, I have a client that's gonna pay me $15,000 a month, but they won't pay me unless I have a, like, a corporation or an LLC or something, then you're like, okay. I mean That makes sense.
Myiesha Fisher:Go. Yeah. Let's do that.
Anastasia Aiello:Yeah. If it's just, you know, you're going to be making little pieces of pottery and selling it at farmer's markets maybe a couple times a year Yeah. Maybe that's not something that necessarily needs its own separate business.
Myiesha Fisher:Yeah. At least not yet, unless you're like, okay, wanna expand or I blew up and now I got a lot of orders and stuff. So just making sure you're not making extra work for yourself for not as much benefit as it would be. So, yeah. No.
Myiesha Fisher:That's fair.
Anastasia Aiello:Mhmm. Mhmm.
Myiesha Fisher:We also did a farmer's market before. We had a whole little thing. We're multitalented. I know.
Anastasia Aiello:The things I do supercrastinate. Yeah. Yeah.
Myiesha Fisher:Okay. Cool. So I feel like that does, like,
Myiesha Fisher:kind of explain it. It's, like, really just making sure, like, I love a good pro con list. Like, what are the benefits if I did do this thing and created this, entity? And then also just making sure that the person is looking at what state they're trying to do this entity in as well. And Yeah.
Myiesha Fisher:Even if you're like, I'm gonna make my entity somewhere else, but if you're working in California, California is still gonna want that fee. So just like making sure that they have all of the information Mhmm. To then really weigh the options and does that make sense. So that's a lot of like our conversations when we get like intro client calls and stuff of just like figuring out. A lot of the other times is they've already done it.
Myiesha Fisher:So they've already made the entity and then we're like, okay, cool. And they're like, I think I wanna do an s corp and that's the whole separate conversation of like, does that make sense? Because now we're we're like upgrading and we're doing more things, but then there's more fees. So a lot of it is just like, what are we doing here, guys? Like, what do you want out of this?
Myiesha Fisher:And then let's like, let's make sure we're on
Myiesha Fisher:the right pathway for it. So, yeah.
Anastasia Aiello:Right. Right. So a lot of it, you know, like I said, from a tax standpoint Mhmm. Especially, like a micro small business Yeah. Having an LLC versus keeping it as a sole proprietorship isn't really going to make any differences Yeah.
Anastasia Aiello:From a tax standpoint Mhmm. At least on the federal level. Yeah. So a lot of you know, if you're going to remain a single member LLC, then a lot of those same strategies would be available to you if you were as a sole proprietorship Yeah. As well.
Anastasia Aiello:Mhmm. A lot of those qualifications are going to be know, sometimes, like you said, it can take some time to create entities.
Myiesha Fisher:Yep.
Anastasia Aiello:And, I mean, sometimes I say, like, the hardest part is figuring out the name and making sure that the name is available. Yep. And doing all of that fun stuff. So sometimes it does make sense, especially if you know you're going to ramp up and you have all of these plans. That way, you're getting the entity set up now because when you're a sole proprietor, you can still get a business bank account.
Anastasia Aiello:Mhmm. But if it grows in six months to the point where you want to become an s corporation at that point in time, then you would have to create an entity with the state, which means a new name, a new EIN, and a new bank account Mhmm. And a new w nine, and changing everything with your clients because now they're paying a different person. So all of the information that you gave them originally has to be completely redone. Sometimes, like, contracts need to be redone.
Anastasia Aiello:Yeah. All of that fun stuff. So, you know, there are situations where maybe you're not completely there today, but Makes sense. Yeah. Right.
Anastasia Aiello:It's going to save you a ton of paperwork kind of later on because by the time you get to the point where the business has grown far enough that you need to have an s corporation, normally, you're so busy that you don't have enough time to, like, change everything, create a new Stripe account, create a new bank account, create a new, you know, like Yeah. New website, new email, like, new everything. Mhmm. You know? And even just to the point of, like, now when you have, like, branding because a DBA Mhmm.
Anastasia Aiello:Is fine, but a DBA for your personal name is normally filed just in your county. Yeah. So if you go to LA County and then you request the DBA, all of that fun stuff, that doesn't necessarily a 100% mean that that name is going to be saved on the state level. Mhmm. So it might be available on the state level today, but in six months
Myiesha Fisher:May not be.
Anastasia Aiello:Yeah. May not be. Mhmm. So, if you are really focused on, like, your branding and the name and, you know, buying websites and email accounts, all of that fun stuff. Having the entity already kinda preregistered with the state is helpful.
Anastasia Aiello:And even I mean, we've seen people that, like, really fall in love with all of their information, but then they get, like, a cease and desist order because they're using somebody else's copyright because they filed for the copyright before you actually filed with the state. So, you know, like Mhmm. Creating that entity sometimes can, like, start different triggers. And, obviously, like, a lot of that can be legal reasoning. Mhmm.
Anastasia Aiello:You know? So I'm just gonna speak to, like, the financial investment in building a brand Yeah. And getting attached to a brand Yeah. And having momentum behind a brand. Mhmm.
Anastasia Aiello:You know? That sometimes, you know, if you're going to invest a decent amount of money into this this information, then maybe you do just create the entity even though on the tax standpoint, it's not going to necessarily make any changes for the next, you know, like twelve to eighteen months.
Myiesha Fisher:Mhmm.
Anastasia Aiello:You know? But definitely, if you think that this business is going to last twelve months Yeah. And start making in the 6 figures, and that's kind of the goal, then sometimes that's that's a really good point, you know.
Myiesha Fisher:Yeah. Good starting point. Mhmm. No. That makes sense.
Myiesha Fisher:Mhmm. Yeah. So it really is like that, like, conversation and making sure that they've thought through things and then maybe we have some, like, questions for them that'll make them think through some more things and then just kinda, excuse me, go from there. So yeah. See, this is why I talk
Anastasia Aiello:much. I talk why? You're not used to it. Why do you talk so much? Jeez.
Anastasia Aiello:Yeah.
Myiesha Fisher:Yeah. So, no, it does make sense. Like, I'm just making sure that we're all kind of on the same page and knowing what it is that they want, and it'll be a lot easier to advise of like, yeah, let's go ahead and like get you set up, and then this is what that looks like. These are the costs that are usually associated with it. Or like, okay, if you really don't know like the name yet or different things like that, let's leave it alone.
Myiesha Fisher:There's nothing really like pending, and that gives you some time to just really, like because, once you get your name, it's kinda hard to change the name. Right. Right. Even just, like, for people's memory and stuff, like, they'll have you under a specific type of name. So yeah.
Anastasia Aiello:Right. Mhmm. Right. So it's kind of, you know, especially in those early phases, a lot of it more is based on, you know, do you have any outside requirements that are forcing you to have the company name? And then also more of from a financial planning perspective of this is an investment, and so, you know, what is the value of your brand?
Anastasia Aiello:What is the value of keeping this name even if it's dormant? Because if you've spent $6,000 on the branding and, you know, or 10,000, whatever it may be, and you're in love with it, then maybe paying $1,600 Mhmm. For it to lay dormant for two years isn't a big deal. Yeah. You know?
Anastasia Aiello:Exactly. But those are some of the different questions that we have to kind of go through and make the business owner aware of Mhmm. That, you know, especially in the state of California, it's gonna be a little bit more complicated. And Yep. I mean, really, anywhere is gonna have different requirements, you know, if you wanna have a registered agent and a PO box and, you know, there's
Myiesha Fisher:All the different things. All kinds
Anastasia Aiello:of stuff. So, I guess based on that, what would be kind of your recommendation for people who are thinking about kind of crossing the line from sole proprietor over to an LLC? What are these, like, key questions that they need to ask themselves, before they start moving forward?
Myiesha Fisher:Okay. Oh, I'm not you see you asking me questions. I'm like, okay. Okay. So let's see.
Myiesha Fisher:I would say it would be based off everything we've talked about. Does it make sense right now to do so? Like, are they going to have, the, like, the money coming in that they wanna have it to a business, like EIN number instead of to them, like, personally? And then do they already have, a name and branding? Have they already started doing some stuff or selling themselves as a like specific name or branding that it makes sense to like, let's lock that in, make sure it's available so no one can have it.
Myiesha Fisher:Those are two. Do I need a third? Okay. Yeah.
Myiesha Fisher:Is that good?
Anastasia Aiello:A lot of it is like. Yeah. Yeah. Just really being serious about what is Yeah.
Myiesha Fisher:Yeah. Yeah. What are you looking for? Like, what are we wanting at the end of this? Yeah.
Anastasia Aiello:Yeah. Being very intentional Yeah. About the selection and the purpose of the business. Sounds
Myiesha Fisher:so woo
Myiesha Fisher:woo because we do a lot of that ourselves personally with, like, making sure we're going with intent. But I do think it's very helpful. Like, just what are the actual intentions of what are you trying to get to?
Anastasia Aiello:Yeah. Right. Because we get a lot of people that get all kinds of scary letters because of things that they completely forgot about that they did ten years ago, and now they owe all the You could touch this thing
Myiesha Fisher:in forever and be like, you had to pay on that. Yeah.
Anastasia Aiello:Yep. Yep. Yep. So, just making sure that there is an intention Mhmm. A very defined purpose for this Yeah.
Anastasia Aiello:And goals, so that when we are talking through making a financial investment into creating an actual standalone business Mhmm. Versus kind of like a side hustle hobby. Yeah. You know, we're really treating it from the get go as a full blown business. Yeah.
Anastasia Aiello:And even that's those are the actions that the IRS is looking for Yeah. Is are you being serious about this?
Myiesha Fisher:I do feel like we harp on it a lot, like intention, intention, intention. Like, treat it like you intend it to be, so that way, from the jump, you're already organized. Like, you already got your backup and your stuff. So, yeah.
Anastasia Aiello:Mhmm. Mhmm. Mhmm. Mhmm. Yeah.
Anastasia Aiello:Because the worst way
Myiesha Fisher:less of a headache.
Myiesha Fisher:I know. Yeah.
Anastasia Aiello:I mean, hobbies, you have to claim all the income but none of the expenses. Yep. So Yeah. You know, like that's gonna be a killer Mhmm. Right from the beginning.
Anastasia Aiello:So
Myiesha Fisher:As a collector of hobbies? Yes. I agree.
Anastasia Aiello:Yeah. That is a little bit more about kind of some things Yeah. To think about Yeah. Before you go down the pathway of creating an LLC, especially as that gets easier and easier Yeah. These with technology
Myiesha Fisher:and yeah. Mhmm.
Anastasia Aiello:Yeah. Maybe before you go down all of those paths, really take the time, create a business plan, make sure it makes sense for you at this moment. Mhmm. And then also maybe talk through some entity planning if there's Yeah. Like multiple projects that Yeah.
Anastasia Aiello:Yeah. Always have had a in line. So
Myiesha Fisher:And you can always talk to us too. Like, we're available. People love talking to me. So
Myiesha Fisher:Go ahead. Close this out.
Anastasia Aiello:Yes. Yes. So if you have any more questions about whether or not you should create an LLC, you can talk to Myiesha.
Myiesha Fisher:Oh, I know. I've read all of this. Wiggle my day, Anna. Or
Anastasia Aiello:schedule a call with me, and we'll kinda go through what fits best for you and your situation.
Myiesha Fisher:Bye, guys. That's it for this episode of Lets Get Fiscal. If this helped you see your business differently, follow or subscribe on your favorite podcast platform so the next episode is already waiting for you. And if a specific money question came up while you were listening, send it through the link
Anastasia Aiello:in the show notes. Real listener questions help shape future episodes. You can also follow Lets
Myiesha Fisher:Get Fiscal on social media for more tax tips, business finance breakdowns, and clips from the show.
Anastasia Aiello:Until next time, keep building the business behind the work.