Elegant Empire LLC Legal Structure for tax reporting purposes:

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Elegant Empire LLC is listed and recognized as a partnership for tax reporting purposes in California. With that in mind, our limited liability company (LLC) members cannot pay its members as employees via a W2.  Secondly, since all our LLC members are partners, they cannot be paid via 1099-MISC or 1099-NEC as independent contractors.

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Per current LLC Laws, we issue California Schedule K-1 (Form 568) to each LLC member. This form summarizes each member’s Share of Income, Deductions, Credits, etc. Company's that elect classification as a partnership for tax purposes use this schedule to report each member’s share of the LLC’s income, deductions, credits, etc.  That means they are subject to self-employment taxes and pass-through taxation for income.

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Who receives a 1099?

Tax regulation requires businesses to issue 1099 forms to certain vendors and independent contractors. A business must issue 1099 forms when they pay over $600 to independent contractors via Form 1099-NEC or for certain services via Form 1099-MISC within a calendar year.

As mentioned, Elegant Empire LLC members are NOT independent contractors and will not receive any 1099 forms. Each member will be issued a K-1 (Form 568). If you believe that you are an Independent Contractor and should receive form 1099 for payments for services, consider the following information first.

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You must FIRST establish a business relationship with us as an Independent Contractor, and at the same time be within the thin boundaries of California Assembly Bill 5, you will need to provide us with the following information:

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• Name of your Business per records

• Business phone number

• City Tax Certificate with your Business Name

• Certificate of Business Insurance

• Business Checking and Routing information

• Summary of your business operations manual

• Summary of your service fees

 

If you opt out of registering as an LLC member with our company AND have not provided us with ALL the above-listed information, we cannot assign any cleaning work through our company.

 

Why should I consider registering as an LLC member with Elegant Empire LLC?

 

Liability protection:

An LLC member has limited liability protection. This means your assets are shielded from business debts. On the other hand, if you go the route of an independent contractor, you will lack this protection and be personally liable for business obligations. 

 

Business structure:

Our LLC is a formally registered business entity with the State of California. Furthermore, we are also registered as an LLC with the City of Oxnard. We cover the yearly Franchise Tax, City Tax, Registered Agent Fees, Statement of Information Fees, and any required business insurance. We d0 all our bookkeeping in-house and provide our members with the data needed to file the corresponding tax forms.

 

Control over work:

As an LLC member, you will have access to our time-tested operational guidelines. Our proven methods will maximize your chance of obtaining and retaining service clients. You will have a degree of control over which clients and cleaning jobs you are willing to do and have a say regarding what days and hours you can work.