Do I Need an LLC for My Gutter Cleaning Business?

By starting an LLC for your gutter cleaning business, you can:

• Protect your savings, car, and house with limited liability protection
• Have more tax benefits and options
• Increase your business’s credibility

Limited Liability Protection

LLCs provide limited liability protection. This means your personal assets (e.g., car, house, bank account) are protected in the event your business is sued or if it defaults on a debt.

Gutter cleaning businesses will benefit from liability protection because of the risk of physical injury from falls and liability from property damage. 

Example 1: A gutter cleaning business is hired to clean the gutters of a home, but accidentally damages the roof while performing the service. Following this, the homeowner sues the business for the cost of repairs. Without liability protection, the owner’s personal assets will be at risk should the business be found to be guilty.

Example 2: A gutter cleaning business is hired to clean the gutters of a home but fails to properly secure their ladder, and it falls against a neighbor’s window, causing it to shatter. Following this, the neighbor sues the business. If the gutter cleaning business was found liable, the LLC structure would help protect the owner’s personal assets.

Example 3:  A customer complains that their gutter system was not properly cleaned, resulting in their basement flooding. The customer then sues the gutter cleaning business for damages. With the business structured as an LLC, the owner’s personal assets will not be affected by any fees associated with the lawsuit.

Example 4: A new employee is cleaning the gutters of a client when he accidentally pulls too hard on the gutter. Part of it rips off and lands on the client standing below, injuring them. The client sues you for the repair costs as well as their medical expenses.

An LLC will also protect your personal assets in the event of commercial bankruptcy or loan default.

To maintain your LLC’s limited liability protection, you must maintain your LLC’s corporate veil.

LLC Tax Benefits and Options for a Gutter Cleaning Business

LLCs, by default, are taxed as a pass-through entity, just like a sole proprietorship or partnership. This means that the business’s net income passes through to the owner’s individual tax return. 

The business’s net income is then subject to income taxes (based on the owner’s tax bracket) and self-employment taxes.

Sole proprietorships and partnerships are taxed in a similar way to LLCs, but they do not offer limited liability protection or other tax options.

S Corp Option for LLCs

An S corporation (S corp) is an IRS tax status that an LLC can elect. S corp status allows business owners to be treated as employees of the business (for tax purposes).

S corp tax status can reduce self-employment taxes and will allow business owners to contribute pre-tax dollars to 401k or health insurance premiums.

The S corp status requires that the business pay the employee-owner(s) a reasonable salary for the work they perform. 

In addition, the business might need to spend more on accounting, bookkeeping, and payroll services. To offset these costs, you’d need to be saving about $2,000 a year on taxes.

We estimate that if a gutter cleaning business owner can pay themselves a reasonable salary and at least $10,000 in distributions each year, they could benefit from S corp status.

You can start an S corp when you form your LLC. Our How to Start an S Corp guide will lead you through the process.

Credibility and Consumer Trust

Gutter cleaning businesses rely on consumer trust. Credibility plays a key role in creating and maintaining any business.

Businesses gain consumer trust simply by forming an LLC.

A growing business can also benefit from the credibility of an LLC when applying for small business loans, grants, and credit.