12 common mistakes

1. 01

   Missing the LLC annual report

   Fix: File the $75 report in the 60-day window before your anniversary month. The late penalty cannot be waived, and continued non-filing can lead to dissolution.

2. 02

   Using a DBA without filing

   Fix: If you operate under a name other than your legal name, file an assumed name with your county ($5-$50).

3. 03

   Skipping newspaper publication after a county DBA

   Fix: Complete the publication step your county requires after filing the assumed name.

4. 04

   Not paying quarterly estimated taxes

   Fix: No one withholds for you. Set aside money and pay estimated taxes each quarter.

5. 05

   Assuming services are never taxable

   Fix: Materials transferred to a customer in a service job can be taxable. Check with a tax professional and register through MyTax Illinois if needed.

6. 06

   Electing S-corp status too early or without a salary

   Fix: Wait until profit is steady (rule of thumb: around $40k-$80k+), and pay yourself a reasonable W-2 salary once you elect.

7. 07

   Commingling funds

   Fix: Use a separate business bank account. Mixing money weakens an LLC's liability separation.

8. 08

   Hiring without workers' comp

   Fix: Illinois requires workers' comp from your first employee. Get coverage before the first day.

9. 09

   Not reporting contractors to the IDES new-hire registry

   Fix: Report new hires within 20 days, and in Illinois that includes contractors. See IDES.

10. 10

    Ignoring city home-occupation rules

    Fix: Check your city's rules. In Chicago, the home occupation license is $250 for 2 years.

11. 11

    Forming in Wyoming or Delaware to save money

    Fix: An Illinois resident must also register as a foreign LLC in Illinois for $150, so it costs more, not less.

12. 12

    Freelancing without a written contract

    Fix: The Freelance Worker Protection Act expects a written contract for work of $500 or more over 120 days. Use one every time.

Not sure which structure fits? Try the Structure Finder, or request help. Call (331) 261-4788