Six answers — and you’ll see which structure fits your business, what it costs in your state and what to do next.
Diagram
The calculator checks your visa first, then looks at risk and partners, and picks the tax regime by profit.
A sole proprietorship is the simplest way to work for yourself in the US: you don’t need to register a company, you do business under your own name and pay taxes as an individual. But you are personally liable for the business’s debts and claims.
An LLC (limited liability company) separates your personal assets from the business and earns more trust from clients and banks, but it requires state registration and annual fees.
If you are just testing an idea, your income is still small and the risk of client claims is low — consulting, design, translation — a sole proprietorship is often enough to start.
Once you have contracts with large clients, employees, a leased space or products that could harm someone, it’s worth considering an LLC.
The filing fee depends on the state: from a few dozen to a few hundred dollars. Some states have an annual fee or report. Add a registered agent if you don’t have an address in the state of registration.
You can get your company’s tax ID (EIN) free on the IRS website. Beware of middlemen who charge for it.
The right to open a company and the right to work in it are different things. Your immigration status may limit active work in the business. Check with an immigration attorney before registering, and with a CPA on tax questions.
A non-resident can register an LLC in the US. But not every status allows you to work in the company — check this with an immigration attorney.
Usually the state where you live and do business. Registering in a “cheaper” state often means registering in your own state too — and paying fees twice.
By default a single-member LLC doesn’t pay tax itself: profit goes on your personal return. You can elect a different treatment — discuss it with an accountant.
Working for yourself is simpler and cheaper. An LLC protects your personal assets and looks more established. The quiz above shows which fits your situation.
The magazine’s tools are for self-checking. They don’t diagnose and don’t replace a specialist’s advice. Calculations run in your browser.
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