Do You Need an LLC to Start Amazon KDP?

Thinking about starting your journey with Amazon KDP but unsure about the necessity of an LLC? You’re not alone; many aspiring authors and self-publishers find themselves asking this critical question.

Do You Need a Business Entity?

“The short answer here is that no, you do not need to have any kind of business entity set up in order to start being an Amazon KDP seller.”
Amazon understands that most of us are starting this as a side hustle. You can launch and grow your self-publishing operation on Amazon KDP without any formal incorporation or LLC. Payments will still flow to your personal account, and you report your earnings on your individual tax return.[verify]

While you can begin under your personal name, consider switching to an LLC if your KDP revenue grows significantly. A formal LLC setup can offer financial clarity, tax advantages, and extra credibility as you scale.

Step 1: Setting up an LLC

If you decide an LLC is right for your Amazon KDP business, follow these steps:

• Choose an LLC Type: A single-member LLC is most common for solo publishers. Formation fees typically range from $100 to $200, varying by state.[verify]
• DIY Registration: Visit your state’s Secretary of State website, follow the instructions, and submit your Articles of Organization directly.
• Online Services: Platforms like Registered Agents Incorporated and LegalZoom can handle filings for you, usually via a guided questionnaire.
• Tax Advisor Assistance: If you already work with a tax professional, they can streamline your LLC setup while ensuring compliance with local regulations.

Employer Identification Number (EIN)

After approval, you’ll receive an Employer Identification Number (EIN). This replaces your Social Security number on business documents and protects your personal identity.[verify]

Doing Business As (DBA)

For roughly $50, you can register a DBA (Doing Business As) name. This allows your LLC to operate under a distinct trade name, which is helpful for branding multiple imprints or niches.

Step 2: Getting a Business Address

Registering an LLC makes your business details public. To protect your privacy:

• Use a Mailbox Service: Private companies like UPS Store or PakMail offer PO boxes that qualify as a physical address and include mail forwarding.
• Cost Considerations: Expect to pay $100 to $400 per year, depending on added features such as mail scanning or package reception.

Keeping your home address off public records reduces spam, identity risks, and makes your publishing brand appear more professional.

Step 3: Getting a Business Bank Account

Separate your LLC’s finances from personal accounts:

• Shop Around: Compare banks for monthly fees, minimum balances, and required transactions. Avoid surprise charges by reading the fine print.
• Opening Bonuses: Some banks or credit unions offer sign-up incentives—cash bonuses or reward points—if you maintain a balance or meet deposit milestones.
• Business Credit Cards: Consider a no-annual-fee card linked to your business. Earn points or cash back on software subscriptions, advertising spend, and other KDP costs.

A dedicated business account simplifies bookkeeping and strengthens your professional image.

Step 4: Filing Business Taxes

With an active LLC, your tax obligations shift:

• Track Income and Expenses: All KDP royalties and business purchases should pass through your LLC’s bank account.
• Forms Required: On your Form 1040, include Schedule C to report business income and deductions. This allows you to offset eligible expenses like software, office supplies, and professional services.[verify]
• Tax Software or Professional Help: Many entrepreneurs use online tax platforms for guided filing. Alternatively, a qualified accountant can ensure you maximize deductions and stay compliant.

Consistent record-keeping throughout the year makes filing far less stressful.

Step 5: Renewing Your LLC Every Year

An LLC requires annual renewal—often called an annual report or franchise tax filing:

• Typical Fees: Renewal costs range from $100 to $200, depending on your state.
• Set a Reminder: Mark your calendar or use an online service to automate renewals and avoid penalties.

Maintaining good standing ensures your business remains protected under LLC liability shields.

Total Cost Overview

Establishing and maintaining an LLC for your Amazon KDP venture involves both one-time and recurring expenses. Initial formation, mail-service fees, and basic business account setup often total around $300. Annual costs—including renewal fees, mailbox service, and potential accountant support—can also average near $300. Weigh these investments against the benefits of liability protection, tax deductions, and professional credibility before deciding on formal business incorporation.

Conclusion

Transitioning to an LLC is not required to start selling on Amazon KDP, but it can bolster your business as earnings climb. From financial separation and expanded tax deductions to enhanced privacy and legitimacy, forming an LLC is a strategic move when you hit consistent revenue.

• Actionable Takeaway: Monitor your KDP profits, and once they approach or exceed $50,000 per year, seriously consider setting up an LLC to optimize taxes and safeguard your personal assets.

What’s your biggest concern about starting your Amazon KDP business? Join the discussion below!