Setting up your styling business.

You do not need an LLC to work on Encore. The simplest setup, a sole proprietorship, is completely valid, and it is what most independent stylists use. An LLC is something you can choose later if you want extra liability protection or your income grows. We cover that option at the end.

Here is the reason people ask. California charges LLCs and corporations an $800 minimum tax every year, regardless of income. A sole proprietor does not pay that tax at all. So forming an LLC before you need one usually means paying $800 a year for protection you can add whenever you like. Start simple.

A sole proprietorship is just you, working as yourself. There is nothing to file to create one and no fee. You report your styling income on your personal tax return (usually a Schedule C), and you set aside money for taxes as you go. Many people make quarterly estimated payments; a tax professional can confirm what fits your situation.

Two optional, free steps make life easier:

• →Get an EIN. An EIN is a free business tax ID from the IRS, available in a few minutes at irs.gov. It lets you put the EIN on your W-9 in place of your Social Security number, which is a nice privacy step. Optional, but recommended.
• →Pick a business name (optional). If you want to work under a name other than your own, for example “Maya K. Styling,” you would file a simple fictitious business name (also called a DBA) with your county. If you use your own name, skip this.

Many California cities ask anyone doing business in the city to register for a business license or business-tax certificate. It is usually quick and inexpensive, and some cities waive it below a small income threshold.

To check, search “[your city] business license” or visit your city’s website, then follow the steps for a sole proprietor or small business. Keep the certificate, since it is part of being set up properly, and Encore will ask you to confirm it where your city requires one. If your city does not require one, that is fine too. You only need it where it applies.

A W-9 is a short IRS form with your name, address, and tax ID (your EIN or Social Security number). It lets your payments be reported correctly. You provide one during onboarding, and our payment processor handles the year-end tax form, such as a 1099, based on it. Encore does not withhold taxes; you handle your own.

Insurance sounds like the intimidating part. In practice it is one inexpensive policy, and here is exactly what you need and why.

• →Required: general liability, $1,000,000 per occurrence and $2,000,000 aggregate. General liability covers the ordinary physical mishaps of in-person work, like a client tripping over a bag in their closet, or something getting knocked over and broken. It is the same coverage every in-person professional carries, and for a stylist it is low-risk and inexpensive. When you join, you upload your certificate of insurance (a one-page proof, usually called a COI), and you keep it current while you are active. Your COI is collected as a record of your coverage; Encore is not named on your policy.
• →Recommended, not required: professional liability (also called errors and omissions, or E&O). Professional liability covers the service itself, for example a client who feels your advice led them to spend money poorly, or a piece that was damaged after following your guidance. The realistic amounts in styling are small, so we leave this one to you. Most stylists who add it do so because it also pays a lawyer to make a complaint go away, even one with no merit. Your call.

Here is the easy part: you do not buy these as two separate policies. Stylist and beauty insurers sell general and professional liability together in a single plan, often around $180 to $500 a year. So if you choose to add the recommended professional coverage, it usually comes in the same simple policy at little extra cost.

Where to get it. Look to small-business or beauty and stylist insurers (widely used options include NACAMS, Next, Hiscox, and Thimble). Ask for general liability for a personal stylist or wardrobe consultant, and add professional liability if you want it. Most take about ten minutes online and hand you the COI right away. (Encore can point you to categories, not endorse a specific carrier.)

If it applies to you. If you will drive clients anywhere, or host them at your own space, your personal auto or home policy may exclude business use, so it is worth a quick question to your agent. Optional, and only if that is how you work.

If you decide you want the liability protection of an LLC, or your styling income has grown enough to justify it, here is the California path and the honest cost.

The steps:

• →File your Articles of Organization (Form LLC-1) online at bizfileOnline.sos.ca.gov.
• →Get a free EIN from the IRS for the LLC.
• →Put a simple Operating Agreement in place. California asks LLCs to have one; you keep it and do not file it.
• →File your Statement of Information (Form LLC-12) within 90 days.
• →Pay the $800 franchise tax (Form 3522) when it is due.
• →Open a business bank account in the LLC’s name, and file a DBA if you will operate under “your-name Styling” rather than the LLC’s exact legal name.

A quick chat with a tax professional is worth it before you form an LLC, just to confirm it is the right move for your income.