Wife and I are looking to start a small side business. What all do we need to do to be "legal"? We will have no employees, just her and I. Seems like all we would need is a State Sales Tax Permit and maybe an EIN?
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Yes and a DBA from the county. -
Technically you don’t need any of that to operate a business legally, just report the income and expenses on your personal taxes. There are some tax and legal benefits to forming an entity of some sort, but depending upon the size of the bizand with no employees it may not be worth the expense/hassle to form an entity and keep separate booksOriginally posted by Hawkpuppy 1 View PostComment
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I would inc. or LLC whatever you're going to do asap. If not you'll be paying killer taxes.Comment
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Originally posted by Mexico View Post
???
How so? Please explain.
How does incorporating allow you to pay less taxes?Comment
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I would also go the LLC route. It is just a little better insulation than a DBA for lawsuits.Comment
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I've started a few businesses and the first thing you do is let somebody kick you in the taint five or six times. That'll prepare you better for what lies ahead.
Seriously though, depending on the type of business you're going into it may not be necessary to go through all the headache you're considering. Just go to the County Clerk and file for a DBA. If your business grows, you can always incorporate later. You may need a sales tax certificate for selling items to the end user, I don't know about that. The purpose of incorporation is simply to provide a veil between the personal and the corporate....financially and liability-wise. It's not always necessary, but sometimes prudent.Comment
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i have a LLC. Its just a layer of protections against lawsuits, all the income from the company goes to my personal return. I had a attorney set it up. There are some perks to having the LLC.Comment
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What exactly is your business going to be doing?
If there is any liability to it, I would suggest incorporating. Otherwise, you could be sued, and someone could go after your personal assets. If the liability is low, I would save your money and set up shop as a sole proprietorship and incorporate once, you start making money.
Incorporating can be expensive and you'll most likely have to hire an accountant to file your taxes.Comment
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Having the LLC allows you to file as a sub chapter s corp and take distributions as a memberComment
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DBA will kill you tax wise. I've been there done that! As a corporation you're looked at as an employee or board member not an owner... it's a huge difference. Somewhere around 10 to 15 percent...plus it protects your personal assets.Originally posted by Burnadell View Post???
How so? Please explain.
How does incorporating allow you to pay less taxes?Comment
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What ever your doing you might consider some liability insuranceComment
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Really depends on the business you will be doing. If your gonna just start small selling a product online(Etsy) the. I would just get going, get your sales tax set up. The one thing I would do is set up completely different books for the company and your personal books. Start a checking account, credit card and any other thing you will need to run the business separate. This way you can truly track your business and see what you are spending and making. Also your accountant can look at your statements and get most he will need to do a simple return for you.
Would only set up an LLC once you get going. Consult an accountant before you set up Corp as their are benefits from a tax stand point that need to be considered.
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I hope to be starting a business soon. Just me and no employees. Is sole proprietor the best for this? I just need a county DBA and a sales tax permit right?Comment
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