Click here for Done Deal Pro home page

Done Deal Pro Home Page

Loading

Go Back   Done Deal Pro Forums > Business > Business Questions and Advice
FAQ Members List Calendar Search Today's Posts Mark Forums Read

Reply
 
Thread Tools Display Modes
Old 11-19-2017, 12:47 PM   #1
nightcrawler
User
 
Join Date: Jul 2010
Posts: 82
Default LLC vs INC? When?

Advice on creating LLC or INC as a screenwriter? Once you have that set up, if you got paid for another position in the entertainment industry aside from writer, can you also have it go through your company (i.e., producing, directing, assistant directing, etc)

Preference on LLC or INC?

I know some advice have been, don't do it until you're making $100+K annually, but what if you're on the cusp of that? Let's say you're sure your option will be exercised next year and you'll get a check for 75k for that script. On top of that, there's a potential another project of your could go some time next year for another 75k or so. Would it be worth it to just create your loan out (llc or inc) at the top of the year then so that you can reap the tax benefits in the event those checks do some later in the year?
nightcrawler is offline   Reply With Quote
Old 11-19-2017, 04:52 PM   #2
JoeBanks
Member
 
Join Date: May 2006
Posts: 1,876
Default Re: LLC vs INC? When?

as a practical matter, it's a distinction without a difference. the tax benefit of either an LLC or a corporation ("S-Corp") is for pass-through taxation so that any profits or distributions are only taxed when you receive them, not also taxed at the time that they're earned. an LLC can elect to be taxed like an S-Corp and isn't subject to the usual corporate formalities, which makes it the preferable entity of choice for writers' "loan out" companies.

https://firemark.com/2015/01/12/shou...entertainment/
JoeBanks is offline   Reply With Quote
Old 11-19-2017, 05:19 PM   #3
AnyOtherName
Regular
 
Join Date: Sep 2010
Posts: 211
Default Re: LLC vs INC? When?

I, too, need to consider a loan-out. Who do I talk to about setting one up? My lawyer? An accountant? Thanks in advance for any advice, hivemind!
AnyOtherName is offline   Reply With Quote
Old 11-19-2017, 06:04 PM   #4
JoeBanks
Member
 
Join Date: May 2006
Posts: 1,876
Default Re: LLC vs INC? When?

lawyer first, then accountant i would think.
JoeBanks is offline   Reply With Quote
Old 11-27-2017, 01:58 PM   #5
nightcrawler
User
 
Join Date: Jul 2010
Posts: 82
Default Re: LLC vs INC? When?

I guess I'll wait to see if these options actually turn into purchases, and deal with them without an LLC or Inc set up for myself. We'll see if any more deals pop up. If they do and my career takes a turn for the better, then I'll set up an Inc.
nightcrawler is offline   Reply With Quote
Old 11-27-2017, 03:18 PM   #6
JoeBanks
Member
 
Join Date: May 2006
Posts: 1,876
Default Re: LLC vs INC? When?

this is not legal advice but generally, especially for loan-out style structures, an LLC is the default entity of choice because it's simpler in terms of formation, provides the same protection against personal liability as a corporation, and the same pass-through taxation benefits as an S-Corp, if so elected. incorporating imposes statutory requirements in terms of maintaining books, board of directors, election of officers, etc. that an LLC does not. all things being equal, i can't think of a compelling reason for a sole proprietor to go with a corporation over LLC at this point
JoeBanks is offline   Reply With Quote
Old 11-28-2017, 01:50 AM   #7
nightcrawler
User
 
Join Date: Jul 2010
Posts: 82
Default Re: LLC vs INC? When?

Great point! But I've seen so many online presences that say an LLC is NOT a loan out. I will definitely contact an accountant and discuss everything before I make any official moves.
nightcrawler is offline   Reply With Quote
Old 11-30-2017, 10:26 PM   #8
ducky1288
Member
 
ducky1288's Avatar
 
Join Date: Oct 2006
Location: LA area transplanted from the south
Posts: 1,415
Default Re: LLC vs INC? When?

Quote:
Originally Posted by nightcrawler View Post

I know some advice have been, don't do it until you're making $100+K annually, but what if you're on the cusp of that? Let's say you're sure your option will be exercised next year and you'll get a check for 75k for that script. On top of that, there's a potential another project of your could go some time next year for another 75k or so. Would it be worth it to just create your loan out (llc or inc) at the top of the year then so that you can reap the tax benefits in the event those checks do some later in the year?
I would speak to an accountant. I always heard if you made $200-250k and above. Most are LLC. But also I would check the terms of those deals because almost writing jobs pay in steps and not all at once. You might get a portion up front, some during, and some after depending on the breakdown. Also if itís near the end of the year you could get the other check in the next year which would change things.

Iím on the verge of incorporating myself. I also believe thereís a yearly fee to maintain the company license or what not each year.
__________________
Quack.

Writer on a cable drama.
ducky1288 is offline   Reply With Quote
Old 12-01-2017, 01:49 PM   #9
jimjimgrande
Member
 
jimjimgrande's Avatar
 
Join Date: May 2005
Location: LA
Posts: 1,221
Default Re: LLC vs INC? When?

I have an S-Corp that was set up by my accountant.

There are annual costs for the corp of about $800 plus periodic accounting and filing that needs to be done, which I pay the accountant to do, but is worth it because it gets done right and I have no idea how to do it anyway.

One of the benefits of the S-corp is that we pay our medical bills through it, which apparently has some tax advantages. I also charge my cell phone, gas, car lease, cable & streaming bills, and more through the corp which has a higher deduction rate than if I did it personally.

So yeah, talk to an accountant familiar with entertainment finances.
__________________

jimjimgrande is offline   Reply With Quote
Old 12-02-2017, 02:04 PM   #10
AnyOtherName
Regular
 
Join Date: Sep 2010
Posts: 211
Default Re: LLC vs INC? When?

It's my understanding that a lot of the #s regarding S-corps will change if/when the GOP's tax bill passes, passthrough entities being one of its main subjects. But I don't know that anyone really knows the specifics of the changes yet, including the 51 senators who voted for it.
AnyOtherName is offline   Reply With Quote
Reply


Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is Off
HTML code is Off
Forum Jump


All times are GMT -6. The time now is 11:13 PM.


Powered by vBulletin Version 3.6.2
Copyright ©2000 - 2019, Jelsoft Enterprises Ltd.
Done Deal Pro

eXTReMe Tracker