LLC for freelancers and remote contractors
Designers, developers, writers, marketers and consultants reach a point where a sole proprietorship no longer fits: a client contract requires a company, an enterprise procurement team will only onboard a vendor with an EIN, or income has grown enough that the S-Corp election could save on self-employment tax. An LLC handles all three and keeps a client dispute from reaching personal assets.
At a glance
Incofile forms the LLC, obtains the EIN, provides the registered agent and a US business address, and files the S-Corp election when that becomes worthwhile.
The three reasons freelancers form an LLC
Liability: if a deliverable causes a client loss, the claim is against the company. Credibility and access: many companies will only contract with an entity that provides an EIN and a W-9, and some procurement systems reject individuals outright. Tax flexibility: a single-member LLC is taxed like a sole proprietor by default, but once net profit is comfortably above the owner's reasonable salary, electing S-Corp status can reduce self-employment tax.
When the S-Corp election makes sense
The election is worthwhile when profits are high enough that paying yourself a reasonable salary and taking the rest as distributions saves more in payroll tax than the extra payroll and tax-return costs — commonly somewhere above $60,000–$80,000 of net profit, though it depends on your situation. Incofile files Form 2553 for you; use our S-Corp tax calculator for a quick estimate.
Freelancers outside the US
Non-US freelancers form US LLCs mainly for payments and client access: Stripe, PayPal Business, US bank accounts and clients who need a US vendor. The S-Corp election is not available to non-resident owners, and income earned by work performed abroad is generally not US-taxed, but Form 5472 is due every year. See our country guides for the rules where you live.
Which state?
US freelancers: your home state. Non-US freelancers: Wyoming or New Mexico for low cost and privacy. Avoid forming in another state as a US resident — you will have to register at home anyway.
Which state should you choose?
What Incofile does for you
- Form the LLC in your chosen state
We prepare and file the formation documents, act as organiser and provide the registered agent in that state — your home address stays off the public record.
- Obtain the EIN
We apply to the IRS for your Employer Identification Number so you can open the bank account and set up payments.
- US business address and mail scanning
A real US street address for banks, marketplaces and payment platforms, with every letter scanned to your portal ($155/year).
- Operating agreement and banking resolution
The documents banks, Amazon, Walmart and payment processors ask for, prepared in your company's name.
- Compliance calendar in your client portal
Annual report deadlines, registered agent renewal and tax-filing dates, with reminders before each one — plus 24/7 access to every document.
Ready to set up your LLC the right way?
Transparent one-time pricing from $0 + state fee. Real humans answer your questions by email and chat, and your client portal shows every step of the filing.
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Freelancers & Remote Workers — frequently asked questions
Does an LLC change how clients pay me?
They pay the LLC's bank account and receive a W-9 with the LLC's EIN instead of your SSN. Nothing else changes for them.
Can I keep using my own name?
Yes — form the LLC as "Jane Smith Design LLC" or form it under a brand and file a DBA for the name you trade under.
Do I need an operating agreement as a solo owner?
Banks often ask for one and it documents that the LLC is a separate entity. Incofile includes it.
Is an LLC better than a sole proprietorship for taxes?
By default they are taxed the same. The advantage is the option to elect S-Corp treatment later, plus liability protection now.
What does it cost to maintain?
The state annual report or franchise tax, registered agent renewal and your tax-return cost. No ongoing Incofile fees unless you add services.