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An LLC has distinct advantages in the areas of legal protection and liability. While there are filing fees for setting up an LLC, that cost can be well worth it when compared to the thousands of dollars you could be liable for as a sole proprietor. On the other hand, it costs no money to start a sole proprietorship.
The followings are exempt from the transfer tax: (1) wills; (2) testamentary or inter vivos trusts; (3) deeds of partition; (4) deeds made pursuant to mergers of corporations, limited liability companies, partnerships, and limited partnerships; (5) deeds made pursuant to conversions to limited liability companies; (6) ...
Sole proprietors are self-employed, which means a sole proprietor will pay personal income tax on business profits and self-employment taxes of 15.3%. An LLC often pays taxes in a similar manner, but has the option to elect to be taxed as an S-Corp.
Declaration of Consideration of Value (This is the monetary amount for which the property is sold. If the property is being transferred without monetary value, it must state in the declaration paragraph 'why' it is exempt from transfer tax.)
In West Virginia, an LLC will allow you to protect all personal assets. For example, if a lawsuit were to occur, your home and personal assets would be protected. This unique benefit is not available when operating a sole proprietorship or general partnership in the state of West Virginia.
West Virginia Business Registration Certificate Every business, including sole proprietorships, must register with the West Virginia State Tax Department for a Business Registration Certificate. You'll need to file for the West Virginia Business Registration Certificate for every public business location you open.
LLC Disadvantages: Increased paperwork compared to a sole proprietor including any industry-specific licensing. Annual state filings required. Additional taxes such as a state business tax or unemployment taxes. Costs for forming and completing a tax return for an LLC are higher than those of forming a sole proprietor.
The PTE tax rate is the top marginal individual rate for the year: 6.5% for tax year 2022. The PTE tax is calculated on a resident's share of unapportioned income. Owners of an electing PTE are allowed to claim a credit against their West Virginia individual income tax equal to their share of PTE tax paid.