Should I have a LLC when working as a independent contractor real estate agent receiving a 1099?
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Should I have a LLC when working as a independent contractor real estate agent receiving a 1099?
Will be working for a small brokerage and receiving a 1099 as an independent
contractor.
Asked on April 11, 2018 under Real Estate Law, Michigan
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
Yes, you should, for three reasons:
1) Since an LLC is both a distinct and separate legal "person" from you and is also not a human being (and so cannot be an employee), having an LLC reinforces and supports that you are an independent contractor and are being paid properly. It helps avoid misclassification claims.
2) It will provide you substantal personal protection from business-related liability--e.g. if you do something while working from the brokerage that could get you sued for negligence (careless work) or breach of contract.
3) By having an LLC and establishing a separate LLC bank account and as necessary getting a seperate credit card for use with/for it, you create a better and cleaner paper trail of business (as opposed to personal) expenses, which will facilitate taking the business expenses as tax deductions.
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