Questions regarding going from Sole Proprietor to LLC

I am starting an operation next year and want to start getting ahead in terms of paperwork.

I am in CA and I want to avoid filing for an LLC this year so I can just start getting taxed starting 2023.

Would it be possible to do all the necessary legwork as a sole proprietor (truck purchase, insurance, authority, etc) and then convert to an LLC on January 2023?

Thank you

 

if youre a single member llc or sole prop its a disregarded entity for tax purposes//

 

I'm trying to avoid the $800 franchise tax that comes along with having an LLC. If I file for the LLC in 2023, ill avoid paying this until 2024.

 

Talk to a lawyer, you got all that ab5 stuff to deal with too out there

 

bumping for visibility

 

If you buy truck then right now it’d be in your name, not company’s name.
The lien holder may not want to swap paperwork, or you’d be making unnecessary trips to dmv swapping title from your name to company name, and showing where now company funds bought it.
Could bring unwanted attention.

Being an LLC is disregarded entity, UNLESS, you classify to be taxed as S corp.
Or C corp, but that’s double taxed, see CPA for more details.

Your going to pay franchise tax regardless, only $150 flat rate/year, in my state, corse CA is considerably higher, and yes it starts the year after formation.
So your only going to save $800, but could be a paperwork nightmare, and inviting an audit, unless you just wait and do it this coming year, only 1.5 months.

 

Seek advice from a professional accountant, tax mistakes can be expensive.

 

FIND an accountant who is an EA, get them involved to help you set this all up, California sucks so you need to have solid legal advice.

 

Leave CA if at all possible.