Frequently Asked Questions
- Do I Need A PLLC?
- Does the PLLC Pay Tax?
- What Happens After My PLLC Is Formed?
- Is The PLLC Retroactive?
- Are There Any Annual Requirements?
- Can I Use This PLLC For Other Business Activities?
- Should I Pay Myself a Salary?
- Why Do You Need My Social Security Number?
- Do I Need To Open A Business Bank Account?
- What is a Statutory Agent?
- What is the cost?
- Is This Legal?
- Do I Need An Attorney?
- Why Use MyPLLC.com?
- Do You Provide Other Services?
Do I Need A PLLC?
If you want to avoid Self Employment tax and gain personal liability protection you need a PLLC. To see your potential tax saving look at Line 56 of your 2010 Individual Federal Tax return. This is the amount of Self Employment tax you could have avoided by having a PLLC.
Does the PLLC Pay Tax?
NO. By Making the IRS S Election the PLLC is a flow-through entity. This means it pays no tax and and the net income of the PLLC flows to your personal tax return on Schedule E, Income from S Corporation. Here the net income is subject only to your personal income tax rate, and avoids the additional Self Employment tax.
What Happens After My PLLC Is Formed?
In order to complete the process, you and your broker must sign and date Arizona Department of Real Estate Form LI-231 which we include with your final package. Take Form LI-231, your existing license and a check for $10 to ADRE. They will issue a new license in the name of your PLLC.
Is The PLLC Retroactive?
Unfortunately, No. Your commission earned prior to the formation of your PLLC is considered income of a sole proprietor and subject to the self employment tax.
Are There Any Annual Requirements?
Yes. Your new PLLC must file Federal Form 1120S, U.S. Income Tax Return for an S Corporation. This tax return is due March 15 but may be extended until October 15. The Form 1120S tax return includes Schedule K-1 indicating your PLLCs business income or loss. This amount must be reported on Schedule E of your personal income tax return.
Aside from filing the annual S Corporation tax return, there are no other actions required to maintain the legal status of your PLLC.
Can I Use This PLLC For Other Business Activities?
No. Pursuant to ADRE guidelines the "sole purpose of the Professional Limited Liability Company is to render professional real estate, cemetery or membership-camping services only." In other words, real estate investment activities such as real estate acquisition or rental property operation are prohibited. You need to form separate LLCs for these activities. Please contact us for this service.
Should I Pay Myself a Salary?
The IRS requires a reasonable salary be paid if the PLLC is profitable. The actual salary amount depends on your specific facts and circumstances. Please consult your CPA or Tax Advisor to determine the amount of salary, if any.
Why Do You Need My Social Security Number?
We need it to complete IRS Form 2553, Subchapter S Election. Your social security number is fully protected on our encrypted, secure website. We do not sell, market or divulge any of your personal information. Your privacy and security is our number one priority.
Do I Need To Open A Business Bank Account?
Yes. Your PLLC is a separate legal entity. You should not commingle personal and business funds. Any bank will open your new account, with a copy of the Articles of Organization and IRS Tax ID number (Form SS-4).
What is a Statutory Agent?
Every Arizona entity that is qualified to do business must maintain a statutory agent located in Arizona. This can be you, your lawyer or your CPA. The purpose of the Statutory Agent is to give notice to the public of a person authorized by the company that can be served with legal documents as the agent of the company. Unless otherwise notified, we will appoint you as the Statutory Agent.
What is the cost?
For a single-member PLLC the fee is $599. This includes expedited filing fees and publication costs.
Is This Legal?
Yes, absolutely. Forming your own PLLC as a real estate agent is 100% legal and highly advisable.
Do I Need An Attorney?
No, you do not. Using an attorney is not a legal requirement to form a Professional Limited Liability Company (or any business entity). While we always recommend consulting the appropriate legal and accounting specialists, we take care of the filings for you and save you the attorney fees. MyPLLC.com is a Arizona Supreme Court Certified Legal Document Preparer.
Why Use MyPLLC.com?
Because time is money. We use leading edge technology to provide you with fast, simple & professional service at an affordable price.
We guarantee our product. We have over 25 years of combined experience working with the real estate community. We specialize in helping you protect your personal assets and pay the least amount of tax legally required.
Do You Provide Other Services?
Yes, we provide Tax Preparation (Personal and Corporate), Tax Planning, Financial Planning and LLC formation for your other business activities.
Please contact us about these services.