What are the costs to establish an LLC and to maintain it?

Question

What's the average (approximately) cost to open a basic LLC in Florida state or in NY state? (FYI in my case is to buy an house in Miami and rent it. I already have a bank account in the U.S.)

What's the average cost to maintain it? I mean accounting + bookeeping + tax filing costs, etc.

Side questions:

1. If I come to Florida or NY state., where do I generally have to go to open/maintain an LLC? Here in Italy we usually ask a CPA (Certified Public Accountant) / tax advisors. Where do I look for them? On the web? What do I need to look for: "CPAs" or "Tax Advisors" or "Lawyers"?

2. How much paper work do I have to do every year to keep my LLC running? Do people in US usually do this on their own, or do they go to places like lawyers or CPAs to manage the LLC book-keeping/accounting/tax-filing and all the paperwork.

   (I would like to be sure I do not make errors. I don't want to end up in jail just because I forgot to pay taxes or added nondeductible costs to the economic income.)

   For instance: I have a small company in Italy and every 3 months I have to bring cost/revenues invoices to the CPA. The CPA registers them and at the end of the year he does the tax filing. So basically he takes care of all the paper work/accounting/tax-filing, etc.

Answer 1

1. The cost will be around $300-$500 if you do it correctly it in Florida and can be over a $1,000 if you do it in New York (New York is more expensive due to a publication requirement that New York has for LLC’s). The price ranges I’ve given include filing, state fees, getting a tax ID number (EIN), operating agreement, membership certificates, registered agent fees and publication fees if done in New York.

   Each state also have licensing boards and city fees that are applicable, so you would want to also make sure that you are keeping compliant there.

2. Yearly paperwork to keep the LLC running won’t be so expensive, expect the state to charge a yearly fee and require some basic information to be submitted. I had a quick look at Florida, and with someone filing it for you, expect around $200 to $250 a year, plus registered agent fees. If you are late in Florida the penalty is $400 so you definitely would want a service that provides compliance calendar notifications to make sure you are on time with fees.

   In regards to bookkeeping and taxes, yearly tax filing will start at $250 to $500 for an LLC and move up from there depending on the services being offered and the amount of time of work. I recently referred someone to an accountant that will charge $250 to file an almost zero tax return on an LLC. I think $40 an hour is a little low for a bookkeeper but it all depends on where you are. I know in some major cities bookkeepers expect $75 an hour or higher. So the expectation in Miami and Manhattan will probably be more expensive than Jacksonville and Albany. If you doing a little business don’t expect the cost to be too much on the bookkeeping.

   So, breakdown:

   $300-$500 (FL) - $1,000 (NY) Registration of LLC + any business license, city or other registrations

   $250 Yearly Fee + Yearly Registered Agent + any business licenses, city or other fee

   $500 Tax Return + Bookkeeping Fee

   Banks will charge more than a personal account so expect $120 a year plus.

   In regards to service I would look at companies that specialize in foreigners setting up businesses in the US, because they will have services designed to help you more than services that primarily specialize with US clients. You are going to have some different needs, based on not having a Social Security Number or establishing from overseas.

Answer 2

I'll answer in general terms, since I'm not familiar with the price ranges in Florida.

The LLC formation costs $125 (state fee). In addition you'll need a registered agent. Registered agent could be your CPA/EA/bookkeeper/property manager/local friend, or you can pay firms specializing in providing registration and agents services such as NorthWestern or LegalZoom (there are many others). You'll need to pay an annual fee of ~$140 in Florida. If you are using someone to do the formation, they'll charge more (usually the on-line services are cheaper than a local CPA or attorney, by $100-$300).

Bookkeeping will probably be charged by the hour, but some bookkeepers charge flat fees for small accounts. Per hour would be probably in the range of $40-$80.

You'll have to pay taxes - both in Florida (where the property is) and on the Federal level to the IRS. You'll be paying them as a non-Resident individual. Your CPA/EA will charge you anywhere between $150 to $500 for that (if they charge more - run away, unless there's some specific complication that requires extra costs). You will need a ITIN for that, your CPA/EA can help you get one or you can apply yourself.

Be careful with all those people selling cr@p about organizing in Delaware/Wyoming/Nevada (like CQM in his answer). Organizing in a state other than where the properties are located (or off-shore) won't save you a dime, and not only that - it will add to the costs. Because you'll have to pay to the state where you organized (CQM mentioned Wyoming - $50/year), keep registered agent in the state of organization (+$99) and also do all the things I've described above about Florida - as a "Foreign" (out of state) entity, which may mean higher fees. It won't save you any taxes as well, because you pay taxes to the state from which you derive income, which is Florida, either way.

Remember that what you call LLC in Italy may be in fact a "Corporation" as defined in the US, and there's a huge difference. You should probably not put a real-estate property in a Corporation in the US.

You must get a legal advice from a (Florida) lawyer ($0-$500/hr consultation), and a tax advice from a (Florida) CPA/EA ($0-$200/hr consultation). Do not consider anything I write here as a legal or tax advice, because it is not. You need a professional to help you because as an Italian, you don't know how things work exactly and relying on rumours and half-truths that you may find and get over the Internet may end up costing you significantly in damages. Also, talk to a reliable real estate agent and property manager before making any purchases.