Best States to Open an LLC for MUA
To start a successful makeup business you need to plan carefully, work hard and pay attention to details. One of the details you should pay attention to is taxes you are liable to pay in your state. So before you open you LLC, check all the advantages and disadvantages.
Before we give concrete examples of the best states to open an LLC OMA team would like to point out some background information. There are two main types of LLC, so called domestic LLCs and foreign LLCs. A domestic LLC is a company that operates only in one (home) state where it was originally formed. A foreign LLC is a company that operates in more than one state and is required to obtain licenses and pay taxes (or other fees) for conducting businesses in other states.
So if you are going to work only in your home state, then you need a domestic LLC, but if you plan to run your business in other states as well, you will need to set up a foreign LLC.
In most cases a makeup
artist should set up an LLC in their home state. It works the best for freelance makeup artists or those who have purely online business (for example, online makeup courses).
You might have heard that some states have better options for business. And it is true, but usually it goes to big companies and corporations rather than small businesses. Despite the fact that some states have lower taxes and fees, you should keep in mind the fact that opening an LLC in your home state is easier from an administrative point of view. And you can later open a foreign LLC when you actually need that.
When you start your own business you would probably like to pay as few taxes as possible. There are certain states that have low or no state taxes which will reduce the amount of money you will have to pay. Most states (41 to be precise) have taxes, but there are some that don’t have.
Wyoming
Washington
Texas
South Dakota
Nevada
Florida
Alaska
New Hampshire and Tennessee don’t have state income tax on wages — only dividend and interest income. And here is a list of states with low rates of taxes.
Colorado
Alabama
Georgia
Hawaii
Louisiana
New York
If you plan one day to start a sales business, consider a sales tax that is imposed in most states and the District of Columbia. In this case the tax is called combined state tax. The highest rates are found here:
Louisiana
Tennessee
Arkansas
Alabama
Washington
While the states with the lowest combined state tax are the following:
Alaska
Hawaii
Wyoming
Wisconsin
Maine
Bear in mind that some cities may charge extra taxes. There is another thing to consider before you set up your business. Check the costs of creating and maintaining your business. It may vary from $100 to $500 per year. You can check the costs here.
OMA team recommend you to do a thorough research before you take a final decision, calculate all the costs - not only the starting costs but annual costs as well. In most cases opening an LLC company in your home state is a good choice.