Should I start an LLC for side hustle?

[john6221]

My cousin has asked me to make some repairs on a property that he owns and if things go well I can see this handyman-for-hire turning into a side hustle.

I live in MN and have researched laws regarding licensing. I am allowed to apply for an exemption as a residential remodeler since I make less than 15k. By doing this I would then have a state license number and could apply for permits on his behalf.

In order to apply for the license exemption, I have the opportunity to apply as an individual or form an LLC.

My question is: should I form an LLC for this type of work? Will it be a tax hassle? Is it worth it for liability purposes?

Thanks for your advice.

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[john6221]

Wow..crickets?

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[brute]

You should do some serious research into the various types of corporate structures available. In my opinion, you want something more than a sole proprietorship, but I can't tell you if an LLC is right or not. You will absolutely want something that protects your personal assets from being a part of a claim though.

[Papa bear]

Take a look at what insurance will cost you for this as well. 

I have an LLC for a business, but it is not in labor and it involves more than just myself.  If this is just you, the LLC is a disregarded entity, so your taxes will be treated as if you are a sole proprietor on schedule C regardless (unless you make an election for S Corp or C Corp).  I would imagine the only upside to the LLC would be for liability, but since it is only you doing work, I'm not sure how this would help.  I am not a lawyer and can't speak to this.  For liability purposes, you will need to look at additional insurance. 

Sorry to give you a non answer, but just maybe some things to think about.




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[john6221]

I guess my thought was more along liability. If I do work for someone, and they sued, I wanted to protect my personal assets.

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[Papa bear]

Again, I'm no lawyer. 

But if you do the work as the "employee" (which you wouldn't be unless you go S or C Corp), the "employee" could be sued and the business as well.  I'm not sure that the LLC would protect you at all in that situation.

Although I could be completely wrong. 

Mustachian lawyers assemble!


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[john6221]

Ok...need do to some more digging. I don't ever plan on hiring employees. I would just be sole proprietor. Just wanted to make sure I was protecting myself.

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