Forming LLC- Do I have to pay state non resident agent fees again
- Thread starter steve3752
- Start date
If you want to have your LLC paid commissions, both you and the entity have to be licensed (in most cases).
It sucks if you have a lot of non-res because it basically doubles your licensing fees so make sure it's worth it for you to do that.
It sucks if you have a lot of non-res because it basically doubles your licensing fees so make sure it's worth it for you to do that.
Last edited:
- 5,945
Maybe you could just have yourself and LLC on record in your resident state with the DOI, then have yourself as an individual listed in the LLC as a Member / Organizer.
You may want to reach out to a CPA, though.
The short answer is yes. However, some carriers don’t require your agency to be licensed in other states. For example, UHC doesn’t require it and will pay commissions to the agency even for non-res business. With Humana, I appoint with them individually in non-res states. They pay me and I write a check to the agency.
With that said, some carriers will require you to be appointed both individually and your agency in non-res states. Just the cost of doing business.
You can do that for tax purposes but it makes it tougher to actually sell the agency in the future.
- 10,330
How does that work from a tax standpoint? Or how do you classify the payment from you to the agency?
- Thread starter
- #8
With an LLC you can elect subchapter s for tax purposes. You do not have to pay all of your net profit as income. Just a reasonable amount which is subject to opinion. A lot of accountants will say only pay half of net profit as income and the rest as a distribution like a dividend . That way only half of net income is subject to social security tax. I am 72 so I am not trying to build that up. It does sound like a big hassle though.
I just make a personal payment to the agency and label it as commission from the carrier. On my personal taxes I show it as income (since the 1099 is issued to me and not the agency tax I.D.) and the payment as an expense so it’s a net zero personally. So far so good (been doing it that way for a decade). I do this with my broker dealer commissions as well since they won’t pay it to my agency.
