Should You Form a Nevada LLC?
The short answer is yes...if your business is located in Nevada.
Otherwise, your best bet is to form">http://www.llc-made-easy.com">form your business
entity in the state where your business operates.
There many myths about forming Nevada LLCs and corporations. One
such myth is that you can avoid paying federal income tax by
incorporating in Nevada. That's completely untrue. There is no
way to avoid federal income taxes other than not making money or
leaving the country (and even then they can levy an expatriation
tax).
You can't even avoid state income taxes with a Nevada
LLC. While Nevada has no state income tax, if the state that
you're a resident in does, then when you draw a salary or
profits from your Nevada LLC, you'll be liable to your home
state for income tax. To avoid those high state taxes, you'll
have to move.
Another myth is that you can hide your assets from your
creditors (including ex-spouses and bankruptcy trustees) by
forming a Nevada corporation and handing bearer shares in the
corporation to an accomplice.
Needless to say, these techniques don't work. Bad things happen
when you try to cheat the IRS or a bankruptcy judge. And
actually, it's unnecessary. Most people, if they used the tax
rules to their fullest, would save more money than they do
already. It is not necessary to cheat to lower your tax bill.
The bottom line is that you should form your LLC in the state
where your business is located.
About the author:
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BR> Simon Maher is a contributor for LLC Made Easy. Learn more
about choosing and managing your business entity at LLC">http://www.llc-made-easy.com">LLC Made Easy.
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