Freelance tax considerations

[RonaldKlondike]

Just curious how some of you other freelancers set up your business for tax purposes. Do you have your client's 1099 you based off your social security #, or have some of you set up sole proprietorships or LLCs? Some of you may even have your client's writing checks to you personally.
I recently set up an LLC for my web design business and am in the process of learning as much about tax law as possible to make sure I don't overlook anything important.
I set up the LLC so that I could separate the business affairs from my personal ones. It is a single member LLC and I have the LLC pay me a set salary for my services.

[Webnerd]

LLC fees are a little overkill for a personal startup. As a Sole Prop, you just keep track of everything, invoice and expenses and pay a good accountant at the end of the year to maximize your deductions. I think going LLC at this point might have been a bit premature and may cost you more than you want to afford. Not to mention, whether you are a Sole Prop or LLC, you will need Errors and Omissions Insurance and that policy is really a blanket that protects you if anyone ever sues you. So, in my personal opinion (I am not a lawyer) I would expense everything as a Sole Prop to start out.

[RonaldKlondike]

I had considered a sole proprietorship, but the LLC provides personal protection from LLC liabilities and the LLC itself. This separation was the key role in my decision. If something were to happen to my business, I would prefer that it stay within the business and not carry over to my personal finances as it would in a sole proprietorship.

[Webnerd]

The likelihood of you entering a situation of personal liability doing websites is slim to none. Now, if you had a partner, rental space or lease agreement, I could justify an LLC.

In your situation, again, it seems overkill.