How to Form an LLC as an Independent Contractor (2026)

This article is for informational purposes only and is not legal or tax advice — consult a licensed attorney or CPA for your specific situation. Some links below are affiliate links; we may earn a commission at no cost to you, which never affects our picks.

If you’ve decided an LLC is right for your gig or freelance business, here’s the good news: you can form one yourself in about an hour, without a lawyer, for the cost of your state’s filing fee. The process is the same whether you drive for Uber, deliver for DoorDash, or freelance — seven straightforward steps. Here’s exactly how to do it.

Not sure you need one yet? Start with Do Gig Workers Need an LLC? — then come back here when you’re ready to file.

First, one myth to kill: form in your own state

You’ll see ads telling you to form in Delaware, Wyoming, or Nevada for “tax benefits.” For a solo gig worker or freelancer, that’s almost always a mistake. If you live and work in Florida and form in Wyoming, you’ll have to register your Wyoming LLC as a “foreign LLC” back in Florida anyway — paying two sets of fees and dealing with two states. Form your LLC in the state where you live and work.

The 7 steps to form your LLC

Step 1 — Name your LLC

Pick a name that isn’t already taken in your state and that includes an LLC identifier (like “LLC” or “Limited Liability Company”). Search your Secretary of State’s business database to confirm it’s available. Keep it simple; you can always operate under a separate brand name later with a “DBA” (doing business as).

Step 2 — Choose a registered agent

Every LLC needs a registered agent: a person or company with a physical address in your state who can receive legal mail during business hours. You can be your own registered agent for free — but your name and address then become public record. Many gig workers use a registered agent service instead to keep their home address private. Formation services like Northwest Registered Agent specialize in exactly this.

Step 3 — File your Articles of Organization

This is the step that actually creates your LLC. You file a short document — usually called the Articles of Organization — with your Secretary of State and pay the filing fee. Most states let you do this online in about 15 minutes. Once it’s approved, your LLC legally exists.

Step 4 — Create an operating agreement

An operating agreement is an internal document that spells out how your LLC is owned and run. Many states don’t require one for a single-member LLC, but you should still have it: it reinforces the legal separation between you and the business (which is the whole point of an LLC), and banks often ask for it when you open an account. Free templates are widely available, or a formation service can generate one.

Step 5 — Get your EIN from the IRS (it’s free)

An EIN (Employer Identification Number) is your business’s tax ID. You need it to open a business bank account and to file business taxes. Get it directly at IRS.gov — it’s free and takes about five minutes online. Never pay a third party for an EIN; some services quietly charge $50–$100 for something the IRS gives you at no cost.

Step 6 — Open a business bank account

Keeping your business and personal money separate isn’t just tidy — it’s what preserves your liability protection. If you mix funds, a court can “pierce the corporate veil” and treat your LLC as if it never existed. Open a dedicated business account with your EIN and run all gig income and expenses through it. See our roundup of the best bank accounts for gig workers for accounts built for this. With the account open, you can start to build and monitor your credit — the foundation for business financing later.

Step 7 — Stay compliant going forward

Most states require an annual (or biennial) report and a small fee to keep your LLC active — miss it and your state can dissolve your LLC. Put the deadline in your calendar, keep your finances separate, and renew your registered agent if you use a service. That’s the entire ongoing burden for a solo LLC.

What it costs

Two numbers to plan for:

• The state filing fee — a one-time cost that ranges from roughly $35 to $500 depending on your state.
• The annual report / franchise fee — a recurring cost most states charge to keep your LLC active. This is the one first-timers forget, so budget for it.

If you file yourself, that’s all you pay. If you use a formation service, you pay the state fee plus whatever the service charges (some file for $0 plus the state fee and make money on add-ons).

DIY vs. using a formation service

Do it yourself if you’re comfortable filling out a state form — it’s the cheapest route and genuinely not hard.

Use a formation service if you’d rather have it handled, want a registered agent to keep your address private, or want the operating agreement and EIN done for you. ZenBusiness and Bizee are popular low-cost options; Northwest Registered Agent is the go-to if privacy and registered-agent service are your priority; LegalZoom is the big established name. All of them file the same paperwork you would — you’re paying for convenience and privacy, not a better LLC.

Good news for 2026: no BOI report for most LLCs

You may have read that new LLCs must file a “Beneficial Ownership Information” (BOI) report with FinCEN. That requirement changed repeatedly, and as of a FinCEN final rule in August 2026, companies formed in the United States — which covers virtually every gig-worker LLC — are exempt and don’t need to file. Only certain foreign-formed companies still report. Because this rule has flip-flopped before, it’s worth a 30-second check at FinCEN.gov when you form, but domestic LLCs currently have nothing to file.

After you form: the tax angle

Forming the LLC is the paperwork. The tax strategy comes next. Remember that a single-member LLC is taxed exactly like a sole proprietor by default — same Schedule C, same 15.3% self-employment tax — so the LLC itself doesn’t lower your taxes. The savings only appear if your profit grows enough to elect S-corp status. See how much self-employment tax you’re paying now with the Self-Employment Tax Calculator, and talk to a CPA about whether an S-corp election makes sense.

FAQ

How do I form an LLC as an independent contractor?
Form it in the state where you live: name your LLC, choose a registered agent, file the Articles of Organization with your Secretary of State and pay the fee, create an operating agreement, get a free EIN from the IRS, and open a business bank account. Then file an annual report to stay active.

How much does it cost to form an LLC?
Expect a one-time state filing fee of roughly $35 to $500 depending on your state, plus a recurring annual report or franchise fee in most states. Filing yourself costs only those state fees; a formation service adds its own charge on top, though some file for $0 plus state fees.

Do I need a lawyer to start an LLC?
No. Most gig workers and freelancers form a single-member LLC themselves in under an hour by filing directly with their state. A lawyer is worth it only for complex situations — multiple owners, unusual ownership splits, or significant liability concerns. For a standard solo LLC, the state’s online form is enough.

Where should I get my EIN, and is it free?
Get your EIN directly from the IRS at IRS.gov — it’s completely free and takes about five minutes online. Avoid third-party services that charge $50–$100 for it; they’re selling you something the IRS provides at no cost. You’ll need the EIN to open a business bank account.

Do LLCs have to file a BOI report in 2026?
As of a FinCEN final rule in August 2026, companies formed in the United States — which includes nearly all gig-worker LLCs — are exempt from Beneficial Ownership Information reporting and don’t need to file. Only certain foreign-formed companies must report. The rule has changed before, so confirm current status at FinCEN.gov.