Really confusing questions. A really confused indie!

This question is such a mishmash that I am going to embed my answers and also give you a taste of indie-style forensic accounting. This kind of email from an indie is not unique. Most times I disregard and don't post them. However, I hope that reading this will help you see a better way of approaching your indie business.


June,

I am in Richland, WA and have an engineering degree. I have registered an LLC as an sole proprieter to develop some software that will soon be bought out.

In the meantime, I am trying to decide how to become independent and pick up technical consulting work. Translated: How do I get clients? Maybe that's what that means. I prefer to do a 1099 with other companies, as I understand that it means I work under their insurance guidelines What kind of insurance? Professional liability insurance? Health insurance? Generally, indies are not covered by their clients' insurance whether the client is an individual or company. What does "guidelines" mean? ? Did an engineering firm offer you insurance coverage even though you'd be an independent?

And what does "understand" mean? Don't enter into an agreement with a client by taking something to be understood. Terms must be explicitly agreed upon. Be careful. Too many indies follow the advice of Aunt Tillie, who has a neighbor who is an engineer and knows for sure.

and I don't need to start my own business per se. You are an LLC structured as a sole proprietorship. You have already formed your own business. And under whose direction did you form your LLC?

I guess my question is... what do I need the LLC for. Why did you form an LLC? -- I am not exactly sure I understand how the 1099 and LLC work together. Shouldn't you have asked what you need the LLC for before you formed it? What were the reasons?

As an engineer and software developer logic, sequence and reason are all at the core of your discipline. I assume your analytical skills and decision-making processes have been developed throughout your schooling. You need to use those same skills on the business side of your indie venture.

I noticed your comment about how one is a tax structure and the other legal, and to fill out the 1099 with my name first, LLC name second, and my own SSN rather than the EIN. I am really confused on this. You're confused? I'm confused, because I can't find where I said exactly that.

Also, does self-employment mean I need to register as a business in my local area and may state and pay business taxes. -- I hope you did a better job of proofing your software than you did of your email. Your sentence has a typo but I'm not sure whether "may" is a typo for "pay" or a typo for "my." The answer to the kinds of taxes paid by an indie can be found on my July post here I am an LLC. How do I pay taxes? Call your local Small Business Association about local business registration requirements.

Please help!
Name Withheld

I hope I have.
June