General information for US creators, not legal or tax advice. Entity rules vary by state and your circumstances matter. Use this to decide what to ask, then ask a professional who knows your state.
Somewhere around the third or fourth brand deal, a creator hears they "should get an LLC" and starts to feel behind. Most of the time the advice is premature, and some of the time it is wrong about why. This guide is a decision tree: five questions, answered in order, that tell you whether you need an entity yet, and which one.
Start here: what you are today
If you have been paid for content and have not filed anything, you are a sole proprietor. That is a legitimate way to run a business. You invoice in your own name, report the income on Schedule C, pay self-employment tax, and deduct your expenses. Nothing about that changes with an LLC except the liability wall and the paperwork.
The decision tree
Work through the questions in order. The first "yes" that matches tells you what to do.
1. Has a brand, agency, or platform asked for a business entity?
Some larger brands will only contract with a business, and some payment or partnership programs want a W-9 with an EIN. If this is blocking a deal you want, form a single-member LLC in your state and get a free EIN from the IRS. It usually takes a week. Yes → form an LLC now, and skip to the "what it changes" section.
2. Could a deal realistically cause someone a loss they would sue over?
Product demonstrations that could injure, claims about a product's effects, filming on location with other people, or content that ends up in a dispute over rights. If your work carries that kind of exposure, the liability wall is worth the filing fee. Yes → form an LLC, and look at general liability insurance too.
3. Is your annual profit from content above roughly $60,000?
At that level, an LLC with an S-corp election can pay you a reasonable salary through payroll and take the rest as distributions, which are not subject to self-employment tax. The savings are real but so are the costs: payroll, a separate return, and a stricter set of rules. Yes → form an LLC and ask an accountant to run the S-corp numbers for your state.
4. Do you want a separate business bank account and a name other than your own?
You can open a business account as a sole proprietor with a DBA in most states, so this alone does not require an LLC. But if you want the cleaner separation and the name on invoices, an LLC gets you both in one step. Yes → form an LLC when the cost is comfortable; there is no urgency.
5. None of the above?
Stay a sole proprietor. Open a separate bank account for creator income anyway, set aside tax from every payment, keep your records on the deal, and revisit this list once a year or when your income doubles. No → do nothing yet, and do it well.
What an LLC changes
Liability. The business becomes a separate legal person. Debts and lawsuits against the business are, if the LLC is properly maintained, limited to the business's assets. "Properly maintained" means a separate bank account, business expenses paid from it, and not treating it as your personal wallet. Mix the money and the wall comes down.
Appearance. Invoices from "Maya Lindqvist Creative LLC" read as established to a brand's procurement team in a way that a personal name sometimes does not. This is real, and it is minor.
Paperwork. A filing, an annual report or fee in many states, a registered agent, and a bank account. An hour or two a year once it is set up.
What an LLC does not change
Your taxes, by default. A single-member LLC is a "disregarded entity": the IRS taxes it exactly like a sole proprietorship. Same Schedule C, same 15.3 percent self-employment tax, same deductions. Anyone who tells you an LLC will lower your taxes is describing the S-corp election, which is a separate choice on top.
Your personal exposure for your own conduct. If you personally do something negligent, the LLC does not shield you from that. It shields your personal assets from the business's obligations.
Your need to keep records. The tax guide applies equally to both.
The S-corp election, briefly
Once an LLC exists, it can elect to be taxed as an S corporation. You then pay yourself a reasonable salary through payroll, which is subject to employment tax, and take remaining profit as distributions, which are not. On $90,000 of profit, paying a $50,000 salary and taking $40,000 in distributions saves roughly $6,000 in self-employment tax, minus the cost of payroll and the extra return, which is why the break-even sits in the $60,000 to $80,000 range for most creators. Below that the savings do not cover the overhead; above it, the election is usually worth a conversation with an accountant.
Costs, state by state, roughly
| Item | Typical range | Notes | |---|---|---| | State LLC filing | $50 to $500 | One time. A few states are at the top of that range. | | Annual report or franchise tax | $0 to $800 | Most states are under $100; a handful charge much more regardless of income. | | Registered agent | $0 to $150 a year | You can be your own in most states if you have an in-state address. | | EIN | Free | Directly from the IRS. Never pay a third party for one. | | Business bank account | Free to $15 a month | Required in practice for the liability wall to hold. | | S-corp payroll and return | $1,000 to $2,500 a year | Only if you elect. This is the cost the savings have to beat. |
What to do this week, whichever branch you are on
Open a separate bank account for creator income if you do not have one. Move a quarter to a third of every brand payment into savings for tax the day it lands. Keep the deal, the invoice, and the license on one record per deal so your books are already clean. Those three habits matter more than the entity, and they are what an accountant will ask for first whether you ever form an LLC or not.
The short version
Sole proprietor is a real business and the right starting point. Form an LLC when a brand requires it, when your work carries real liability, or when your profit is high enough for an S-corp election to pay. It changes liability and appearance, not taxes, by default. And the habits that matter most, separate money and clean records, cost nothing and start today.