Insurance Journal Forums

I am an independent P&C agent. I have been considering, with the help of my current Agency owner, forming an LLC and working exclusively with my current Agency as opposed to being an employee. My compensation (salary and commission) would remain the same but I have been told that the tax benefits may be enough to make the switch. I have been with the Agency for 5 years and my income has increased significantly each year. I’m single with no kids and I am getting taxed out of sight. Any advice, insight, or experience would be very helpful.

My first thought would be to visit with a CPA/Tax Counselor & discuss any benefits the you might enjoy by doing that i.e. un-reimbursed sales expenses you currently incur being taken directly off of your income as an expense. The only negative that I can clearly see is that then you will be responsible for the full FICA/Social Security tax where now your employer pays 1/2 and you pay 1/2. Another potential negative is E&O coverage. Will you be named as an additional insured on the principal's policy or need to secure your own coverage?

If your commission split remains the same stay as an employee. Do the math gregcw mentioned also adding in medical benefits.