Setting up an LLC as a Consultant

dsanabria

Quite Involved in Discussions
#21
Hi Gang,

I am finally at the point where I can interview with registrars for contractual employment, and I’d also like to do some consulting work on my own in the future from time to time as the opportunities present themselves.

I’ve obtained a: "Single Member LLC" including an EIN tax ID number, and I even have business cards printed.

I sat down with a tax accountant, and was told that best thing to do would be to just file my taxes under schedule “C” and call it a day rather than try to do the whole sub-clause schedule “S” stuff which gets complicated.

My question (for all of you that have done this for years) is simply this:

Do people in our profession that double as consultants charge companies sales tax?

I was always under the impression that consulting fee’s didn’t fall under the guideline of charging sales tax. (of course I could be wrong)
I had a very frustrating conversation with a woman at my local Department of Revenue office today.

Upon asking me to explain what type of work I would be doing so she could categorize the business correctly she seemed to be completely lost.

She didn't understand: AS9100, registrars, certification bodies, aerospace audits, or consulting for Aerospace companies, and she kept insisting that I would have to categorize myself under the “Business Management Consulting Services” code which requires charging clients sales tax.

I’m absolutely fine with this if this is correct, but I walked away having this nagging feeling that the woman didn’t quite understand what I was trying to explain to her regarding the nature of the work.

Probably because she kept cutting me off in mid-sentence every time I tried to answer any of her questions.

At present I haven’t committed to anything with the Department of Revenue, and I explained to her that I would be back after I did some more research on the matter.

So if any of you seasoned experts in this field could give me some guidance I would greatly appreciate it.

Thanks in advance…….

I live in CT and most AQMS consultant charge per hour - (around 100 per hr if you want the job or around 175 + if you don't want the job.

for taxes - pay qquartely (around 25% or like me pay at the end - Tax time. I like to hold on and invest my money for a year.... Personal preference.
 

Ninja

Looking for Reality
Trusted
#22
(around 100 per hr if you want the job or around 175 + if you don't want the job.
Ouch. Y'all gotta raise the bar here...$100/hr as an outside consultant is pretty rough with all of the travel, withholding and insurance. I don't think I could make ends meet that low...
 

dsanabria

Quite Involved in Discussions
#23
Ouch. Y'all gotta raise the bar here...$100/hr as an outside consultant is pretty rough with all of the travel, withholding and insurance. I don't think I could make ends meet that low...
Registrar for 91XX pay around 85 - 90 / hr and around 65 - 70 for ISO 9001 (give or take a few dollars.

CONNSTEP in CT pays around 85 an hr.

but you could set your fees at whatever the customer is willing to pay.... SOme sucessful consu;tant / internal auditor charge 1000.00 / day for 8 hrs
 

Watchcat

Involved In Discussions
#24
I don't recommend taking courses on contract law and IP ownership if you are planning to consult. I recommend securing the services of a good attorney. I see a lot irony in consultants wanting to DIY instead of pay for expertise.
 

Ninja

Looking for Reality
Trusted
#25
I don't recommend taking courses on contract law and IP ownership if you are planning to consult. I recommend securing the services of a good attorney. I see a lot irony in consultants wanting to DIY instead of pay for expertise.
Please note that I recommended BOTH, not DIY. You absolutely should use an outside attorney...but you should be up to speed as well, not dependent.

I've caught things that my attorneys have missed (and I use attorneys who teach this stuff in law schools). No one is perfect, not even experts...I recommend that if you work repeatedly in an area (contract review) that you get yourself capable.
I did not recommend getting a law degree, just studying the particular areas of concern (Contract and IP law).

I save a lot of attorney fees handling the obvious stuff first on my own, then running the resulting contracts past attorneys before signing.
Key point, I run them past my attorneys before signing...
 

Watchcat

Involved In Discussions
#26
OK, so I studied both contract and IP law, but not for my consulting. And yes, I do participate in legal and financial decisions. Yet for some reason, I don't recommend it for others. I guess I think that, if you aren't naturally oriented towards legal and financial stuff, you should probably just leave it to your attorney and your accountant, and concentrate on that which you are naturally oriented towards.
 

Ninja

Looking for Reality
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#27
Fair enough. I review about ten contracts a month on average between consulting agreements, purchasing contracts and NDA's. If my default reaction was to send them to an outside attorney, I'd be broke and the lawyer would have a yacht.
Assuming the final call goes by an expert in the field, the prep stuff falls into the "personal preference" pile...I prefer to handle the obvious stuff myself, and send the final to the Lawyer so it costs less...others may have different or opposite preferences.

One way around some of it is to have your own pre-vetted contracts for NDA, consultation, etc. It helps some, but many companies rigidly insist on using theirs...so you either review theirs, fight over whose to use for months, or do without the business.
 

Ed Panek

VP QA RA Small Med Dev Company FDA and ISO13485:16
Trusted
#28
Remember we have a progressive tax in this country. You cant just take 30% of X to get what your take home is going to be.
 

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