Business tax ID - Partnership or LLC?

[SpiralTouch]

I am about to file for a business tax ID so I can get a transient vendor's license to sell at a local market once a week.

My husband and I have decided to file for a business together. He currently works at a spa but has had a webpage designed and is working on the final details with renting a space for massage. He was going to file for his own business anyway, so this is perfect timing.

I have been reading a lot about partnerships and LLCs. I honestly cannot tell the difference between them since you use the same tax form when you file your yearly taxes. Can anyone tell me the benefits of choosing one over the other? What have you chosen for your business?

If it helps, I will be making his massage creams and oils that he uses on clients. I will also be selling body butters, scrubs, CP soap, etc once a week in the summer.

 

[melstan775]

If you are filing multiple business ventures under one name, I encourage you to put the word "Enterprises" in your name, and file for enterprise protection if you can. Enterprises are specifically for multiple-task businesses. I don't think there's a lot of difference between LLC and LLP except one legally states it's a multi-partner proprietorship. I think there's probably more protection of your assets if you file as an LLC because it separates your companies from your business.

 

[SpiralTouch]

An update.. We got a business tax ID about a week ago. Filed for a LLC

I was a little concerned since it only asked for the name/address of one (main) person which we listed as my husband. It also asked for the main aspect of the business which we listed as massage therapy since that is what makes the majority of the income. It did ask for number of people in the LLC and we put 2.

I am hoping this is okay for us to file deductions for all my soaping supplies when we do our taxes next year. I also used this tax ID to apply for a vendors license

 

[melstan775]

For main aspect, you could have put "multiple service enterprise." You should double check that your insurance will cover multi-branches, and make sure your license will cover it as well. You should be okay since it asked for the main aspect and not a sole aspect. I know it varies state-to-state, and Nevada is crazy. Hopefully it's not as hard for you. Licensing regs are a bish, I hope it all works out for you. In the end it comes down to taxes anyway, and the IRS won't care what you file as long as it's all in order. Keep us updated and good luck!