{"id":5167,"date":"2024-08-01T10:46:39","date_gmt":"2024-08-01T15:46:39","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/starting-a-business\/do-i-need-an-llc-for-my-side-hustle.html"},"modified":"2026-05-26T14:21:00","modified_gmt":"2026-05-26T19:21:00","slug":"do-i-need-an-llc-for-my-side-hustle","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/do-i-need-an-llc-for-my-side-hustle.html","title":{"rendered":"Do I Need an LLC for My Side Hustle?"},"content":{"rendered":"\n
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Do I Need an LLC for My Side Hustle?<\/h1>\n\n
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\n By Catherine Hodder, Esq.<\/a> | Legally reviewed by Jordan Walker, J.D.<\/a>\n | Last updated\n
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Editorial Note: We earn a commission from affiliate partner links on FindLaw. Commissions do not affect the editorial integrity of our legal content.<\/p>\n\n <\/div>\n \n

\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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An LLC provides several advantages for a side hustle such as protecting you from business liability, projecting a more professional image, providing a flexible tax structure, and proving independent contractor status.<\/p>\n\n <\/div>\n\n\n\n

Ready to form your LLC with confidence? Our trusted partner LegalZoom has packages starting at $0 + filing fees.<\/a><\/i><\/b><\/p><\/div>\n\n\n\n

A side hustle<\/span> is a great way to earn extra income<\/span>. However, you may wonder, depending on your type of business<\/span>, if an LLC is suitable for you. Learn how you and your side business<\/span> can benefit from LLC formation.<\/p>\n

Whether you work for a ride-sharing or delivery service like Uber, Lyft, or DoorDash, or have a side gig<\/span> such as tutoring or babysitting, you may consider an LLC.<\/p>\n

If you manage real estate<\/span>, rental properties, or short-term vacation rentals such as Airbnb, there are more compelling reasons to form a limited liability company<\/span><\/a> (LLC), namely for personal <\/span>liability<\/span> protection<\/span>.<\/p>\n

Many small business<\/span> owners<\/span> begin as sole proprietorships<\/span>. A sole proprietorship<\/span> is a single individual owning and operating a business. The business owner reports any income or loss on their personal <\/span>tax return<\/span>. However, the business owner\u2019s personal assets<\/span> are at risk.<\/p>\n

Advantages of an LLC for a Side Hustle<\/span><\/strong><\/h2>\n

You may consider forming a business entity<\/span> for personal <\/span>asset<\/span> protection<\/span>. However, an LLC<\/a> has many more benefits, including tax savings<\/span>, ease of business formation<\/span> and operation, legitimacy, and independence.<\/p>\n

Personal <\/span>Liability<\/span> Protection<\/span><\/h3>\n

An LLC is a business structure<\/span> that protects your personal assets<\/span> from your business debts and liabilities. It is a legal entity<\/span> that separates you from your business. So, for example, if you rent out your vacation home, and a renter claims they were injured on your property, they can only sue for your business assets<\/span>. They cannot go after your home, car, or other personal assets<\/span>.<\/p>\n

Flexible Tax Structure<\/h3>\n

As an LLC, you can choose how you want your business classified for tax purposes<\/span>. For example, you can opt to submit tax filings<\/span> as a sole proprietor<\/span>, corporation, or partnership. Many entrepreneurs<\/span> like to include their income or losses on their personal <\/span>income<\/span> tax<\/span> returns<\/span>, called pass-through taxation, to avoid double taxation.<\/p>\n

You may want to talk to a tax professional<\/span> about your circumstances and which structure may be best for you.<\/p>\n

Easy To Start and Maintain<\/h3>\n

Forming an LLC is easy to do with your Secretary of State<\/span>\u2019s office. You complete and file Articles of Organization with the following information about your business:<\/p>\n