I set up an LLC last year for my freelance work, thinking it would be simple. Just found out about the annual report fee ($138 in my state), plus my registered agent charges $125/year. That's $263 I wasn't planning for. Anyone else get blindsided by these yearly costs? How do you budget for them?
LLC Costs
The annual costs of my LLC were a complete surprise
Oh yeah, the annual report fee got me too. I thought it was a one-time thing. Nope.
Wait until you find out about the franchise tax in some states. Texas got me for over $300 last year.
I just add it to my quarterly estimated taxes as a fixed expense. Sucks but at least its not a surprise anymore.
Honestly, this is why I just stuck with a sole prop. The LLC fees weren't worth it for my side gig.
Sole prop has its own risks though. Liability protection is the whole point.
I hear you on the registered agent. You can be your own agent in many States and save that $125. Just need a physical address.
I didn't know that! I'll look into it. But doesn't that mean my home address is public?
Yep, and that's why I pay for the agent. Privacy is worth $125.
Also check if your state has a biennial report instead of annual. Mine is every two years, which helps a little.
This is why I keep a spreadsheet of all recurring business expenses. Every January I review it. Boring but effective.
Don't forget the annual fee for your business license if your city requires one. That was another $50 I didn't see coming.
And if you have employees, unemployment insurance, workers comp... it never ends.
No employees here, just me and my laptop. But good to know.
The real kicker is when you forget to file and get a late fee. I paid double one year because I missed the deadline.
Set a calendar reminder for 2 weeks before the due date. Saved me last year.
Also, some states require you to publish a notice in a newspaper when you form an LLC. That can be $100+ depending on where you are. Not annual, but still a surprise.