Questions on LLC

[NWSINS]

The 1099 would not go to an individual; it would go to the company, same as the commissions. Your company would pay you.

What I did was get my new LLC licensed as an agency. Then have commissions assigned to the agency. Then by getting my wife licensed (she's a partner in the LLC), renewals would continue to pay at my death. Apparently this course is especially important with MA renewals. Too early yet to tell if that was good advice.

You are a potentially a "partnership" not a single LLC

Joint Ownership of LLC by Spouse in Community Property States
Rev. Proc. 2002-69 addressed the issue of classification for an entity that is solely owned by husband and wife as community property under laws of a state, a foreign country or possession of the United States.
If there is a qualified entity owned by a husband and wife as community property owners, and they treat the entity as a:
Disregarded entity for federal tax purposes, the Internal Revenue Service will accept the position that the entity is disregarded for federal tax purposes.
Partnership for federal tax purposes, the Internal Revenue Service will accept the position that the entity is partnership for federal tax purposes.
A change in the reporting position will be treated for federal tax purposes as a conversion of the entity.
A business entity is a qualified entity if
The business entity is wholly owned by a husband and wife as community property under the laws of a state, a foreign country, or possession of the United States;
No person other than one or both spouses would be considered an owner for federal tax purposes; and
The business entity is not treated as a corporation under IRC §310.7701-2.
Note: If an LLC is owned by husband and wife in a non-community property state, the LLC should file as a partnership. LLCs owned by a husband and wife are not eligible to be “qualified joint ventures” (which can elect not be treated as partnerships) because they are state law entities. For more

 

[Chris@ACAExpress]

It seems to me that NWSINS already knows everything. Not once has a post been made on this that hasn't been argued with. hmmm....

 

[Guest]

I have set up an single member LLC and I am trying to assign all my commissions to the LLC. IRS guidelines state that a single member LLC must use their personal social security number for W9 tax payer information. Some insurance company's refuse to assign commission to the LLC and use my social security number for the W9 tax payer. For those of you single member LLC's, what are you doing to make this process easier? I am missing something?

I am sorry- this does not make since to me. A carrier who won't let you use an EIN and instead requires your SS#? Regarding the other part of your post, you need a better CPA! If you don't have one, get one. The IRS loves us small business/ self- employed guys

 

[TwiLight]

I may have missed it in all the jiberish. The point is: A single member LLC must be a licensed entity in most States, no matter the TaxID.

License the LLC first in your State and then contract the LLC with you as the licensed responsible party. Basically a simple process for the insurance company and you to do. The FEIN is easy to get by phone/online at the IRS as you disclose your SS# during the application process.

Your CPA will disclose to the IRS at tax time how you will be taxed. You are 2 steps ahead of the process and need to start over. You are eligible to apply for an FEIN. Your CPA will then link your FEIN and SS# when it is tax time under the rules you stated.

 

[Milkman1265]

Why do you have a LLC?, e&o or tax purpose?

 

[TwiLight]

Why do you have a LLC?, e&o or tax purpose?

LLC is a simplified closely held S-Corp for tax purpose. Mostly for those with large deductions and $100k+ in income.

The best reason for a corp or LLC is for succession planning for an agent to pass on the renewals to family.

 

[WCMason]

LLC is a simplified closely held S-Corp for tax purpose. Mostly for those with large deductions and $100k+ in income. The best reason for a corp or LLC is for succession planning for an agent to pass on the renewals to family.

That is the best reason and why I did it. I had considered it prior to discovering the loss of renewals as their is some tax savings on the profit portion of earnings, but once I found out about renewals not passing through at my death I jumped on it.

 

[pfg1]

I have an S-Corp. Some companies will direct deposit commissions into my company account, some won't. The one's that won't...they said they would only do it IF my company was actually the licensed agent (instead of me). I'm not sure why some will and some won't, but its not a big deal to me. I just transfer over any commissions that aren't deposited into my business account directly as soon as they land in my personal account. (A good idea would be to open a separate personal account that is only used for this).
The 1099 still comes in my name, regardless of where the money is deposited since I am the licensed agent.

 

[WCMason]

I have an S-Corp. Some companies will direct deposit commissions into my company account, some won't. The one's that won't...they said they would only do it IF my company was actually the licensed agent (instead of me)...

This was the reason I got an agency license with the DOI. I want everything paid to the entity. Now I just did this and have not yet completed getting all carriers to assign commissions to the agency, so too early to tell if any will prove difficult.

One thing that did happen in that agency licensing process was the DOI discovering that a few years back, when I did my first CE training after licensure, I had completed 15 of the 30 credits the day of and day after my renewal date; one and two days past the deadline. My agency license was delayed until a $750 fine was paid for being late ($50 X 15), issued within days after it was paid. I had no idea then how strict they were, but was glad that was the only year I had procrastinated. Thought this might be helpful to add for all new agents who may be as clueless as I was back then.

 

[TwiLight]

This was the reason I got an agency license with the DOI. I want everything paid to the entity. Now I just did this and have not yet completed getting all carriers to assign commissions to the agency, so too early to tell if any will prove difficult.

One thing that did happen in that agency licensing process was the DOI discovering that a few years back, when I did my first CE training after licensure, I had completed 15 of the 30 credits the day of and day after my renewal date; one and two days past the deadline. My agency license was delayed until a $750 fine was paid for being late ($50 X 15), issued within days after it was paid. I had no idea then how strict they were, but was glad that was the only year I had procrastinated. Thought this might be helpful to add for all new agents who may be as clueless as I was back then.

What State? Sounds like Virginia.