Ask MetaFilter questions tagged with business and tax

Small business tax guide?

entropic — Mon, 21 Dec 2009 07:33:22 -0800

Can you point me to a simple online tax guide for small businesses? I'm looking for a simple tax guide for a small business owner - ideally something that tells me what forms I need to fill out based on our status (LLC filing as a partnership), what deadlines I need to be aware of, how to document various expenses (i.e. reimbursing myself for startup expenses), etc. I know you ANAA, ANAL, etc. Also, any recommendations for a book are welcome. Right now I'm considering JK Lasser's Small Business Taxes 2010.

Blogging and Money and Taxes - Oh My!

catcatwomanman — Mon, 08 Dec 2008 11:47:35 -0800

blogging as a business and taxes - it can't be so difficult! Or can it? The Plan - spouse and I want to start a travel blog (we love to travel and are *good* at it!) as a business. You know, run some google ads, make a little money. Actually, if we make enough to cover our travel, we'll be happy (until the eventual greed kicks in). Soooo... if we're going to make more than $600 here in America, the IRS is going to want it's share. But two can play at that game! We want to take all the deductions we can (home office, website costs and, of course, our travel). It will just be the two of us, no employees. But therein lies the confusion... As this will be a partnership (rather than a Corp or LLC), can we carry losses over to our personal incomes (initial research says yes, hivemind says... ?)

Any advice from anyone who has a blog making money?

Any advice from anyone running a web-only based business?

Any advice from anyone who doesn't meet the above criteria but is 99% sure they know what they're talking about?

Do you recommend a business tax id number? A business bank account? A business anything else?

Do we pay estimated quarterly taxes? Even if we're losing money?

What about employee tax of 15%? Pay that too? Quarterly? Even if we're losing money?

Any online references you recommend?

Super duper thanks in advance!

Artist Forming a Business

bdoop21 — Mon, 01 Dec 2008 15:37:57 -0800

What is the difference between a Master of Business License and a LLC in Washington State? Which one would be more appropriate for a freelance artist/product designer/jeweler to have? I need to have a Tax ID number for my business, is that the same as a UBI number? Thanks!

Help me make sense of small businss tax forms!

kmtiszen — Wed, 27 Aug 2008 20:09:14 -0800

Starting a small, part-time, home-based eBay business in New York. What are the implications of registering for a Sale & Use Tax certificate? It looks like I'm going to need this certificate (DTF-17, I believe) before I deal with most wholesalers. I'm having trouble wrapping my head around the purpose/implications of all these wonky tax forms, especially the "sales & use" tax. Could somebody possibly explain this one to me in my right-brained kind of English? What will it mean once tax time rolls around in April?

Unfortunately, I was not born with a gift for this kind of stuff, and I envy all of you who were. So thanks in advance for your big brains!

Any word if the IRS will rate the 2008 mileage rate because of the rapid increase in gas prices?

GuyZero — Mon, 09 Jun 2008 17:59:38 -0800

Any word if the IRS will rate the 2008 mileage rate because of the rapid increase in gas prices? The IRS set the 2008 mileage rate for business car travel way back in November of last year at 50.5 cents per mile. That's still more than the price of gas, but not as much as it was back then. Has anyone heard if the IRS will raise this value? (Note: I'm not going to claim it per se, but my company ties their mileage reimbursement rate to the IRS rate)

Where should I register my company?

mateuslee — Tue, 09 Oct 2007 03:57:08 -0800

I'm going to register my company as an LLC. My next question is where? Which US state is the best for this?
I posted a Q here a few weeks ago, and you guys really helped me out (thanks!)

http://ask.metafilter.com/70013/A-new-business

I'm now curious about where you think I will be taxed the least and deal with minimal hassles. I heard good things about WY, NV, and AL - but a google search reveals only adverts and little data.

I think I can register in any state I choose to and the process of becoming an LLC seems like something I can do myself just via a state's website. If you have any experience with this, please share it. I'm really a newbie. Bonus points if you can indicate a trustworthy accountant in the state who can file taxes for the company once formed and do any legwork that I can't do myself. Cronyism/nepotism ok.

Thanks a lot!

Tax MetaFilter

sprocket87 — Fri, 28 Sep 2007 20:54:47 -0800

I'm planning to do some on-the-side freelance photography in the next year. I'd like some advice on how to play the tax game most effectively. I have an 8-5 weekday job that pays my bills, but I'll probably be doing a small-potatoes amount of photography as a side business over the next year. Nothing to warrant obtaining a business license, incorporating, or anything like that; probably about 6-12 or so events/jobs at a modest rate. My expected earnings will almost certainly be higher than the $600 minimum for reporting additional income, but not anything in the several-thousand range. After doing a bit of research, here's my game plan:

1. Keep detailed receipts and records of ALL income and potential business-related expenses
2. Use 1040 (long) as normal for personal filing of W2s
3. Also file as "sole proprietor" using form Schedule C-EZ for business income based on receipts

Seems simple enough, right? Well, I'm wondering about deductions: I know with the Schedule C-EZ I'm allowed to file up to $5,000 worth of business expenses. I'm NOT planning on filing a home office expense, etc. But what about photo gear, computer equipment, software, or web hosting/printer subscription costs? Should I deduct these?

The obvious answer to me would be "yes", but I'm wondering that since I won't be making a tremendous amount of profit, it might be wiser to ignore some of those deductions to keep "under the radar". I mean, I'd love to get a new MacBook for my photo editing and write it off as a business deduction [which it legitimately would be], but if that offsets the majority of my profit, would the IRS consider me as being a "hobby" and screw me in the long run?

I know that the IRS looks for net profitability in 3 out of 5 years after filing as a sole proprietor. I don't plan on making this a primary source of income - be it next year or in five. Just a little side earnings. So would it be smarter to take the hit on my tax return and skip deducting too many expenses or to deduct away and keep my fingers crossed?

Would it be safe if I just made sure my net profits above were above $600 after all deductions?

Oh, and you can skip the "you should see a CPA" comments, I know you all ANACPA or ANAL, but I'm just "querying the hive mind" :)

Being taxed as a business, despite being a public employee

the_bone — Wed, 05 Sep 2007 18:28:35 -0800

Los Angeles is hitting me for a big chunk of money for business taxes... this despite the fact that I am a public employee. (In advance: The answer to this question may very well be "get a lawyer/accountant," but I'm not flush with cash at the moment and would like to know what steps I can take short of that.)

I'm a teacher, and I do a small amount of work as a musician. I moved to CA in 2005, and filed taxes for that year here. I included 1099 forms (all from work done in FL, no less) in my tax filings for that year. I also did a small amount of musical work as an independent contractor in CA during 2006.

LA has decided that I am a business for some reason (I don't know why yet), and has decided to tax me. That's cool... but they are apparently basing their estimated tax on all of my income, including that earned as a teacher. The estimated tax far exceeds what I made from my independent contractor work last year in CA.

I'm filing for a hearing (it doesn't help matters that they've apparently tried to contact me, but I moved a few times last year for personal reasons, and some of my mail is just now starting to catch up with me a year later). I have no idea what to expect, what they want from me in terms of documentation, and so on.

I'm sure I'm leaving relevant information out. I have a lot of general anxiety about all matter financial as a matter of course, am having a world-class freakout over this at the moment, and I might be (hell, probably am) mis-explaining. I'll answer questions in the thread... I think my main reason to posting to AskMe is to find out what questions I should be asking LA about this. Thanks.

What to do when the GST is too big for you?

Jimbob — Mon, 03 Sep 2007 23:26:17 -0800

Registering for the GST in Australia for a small consulting job; do we have to? What if we don't? I've managed to get my wife a bit of work doing data entry and management...as a private contractor. We're all new to this. She's got herself an ABN number. The people paying her want her to submit invoices for her payments, and (as you would expect) include the GST amount on there.

However, looking at the Australian Tax Office website, it says that only businesses earning more than $75,000 a year need to register for the GST. This contract isn't worth nearly that much, so it would seem we don't need to register for the GST. Furthermore, as she won't be purchasing anything from suppliers and won't need to claim GST credits, it also seems registration for the GST isn't necessary.

But if we don't register... what happens to the 10% GST we put on our invoices? Do we still collect that and pay it to the tax office? Do we not include it on our invoices as we're not registered? Surely submitting an invoice without the GST component will confuse the hell out of the accountants on the other end.

The ATO website makes none of this clear; they tell you when you should register for the GST, and how to submit activity statements and make payments if you have...their website isn't at all helpful about what to do if you're too small to even register for GST.

Any Aussie Metafiltarians have any ideas?

LLC, S-corp or continue as a sole proprietor?

photoslob — Tue, 03 Apr 2007 18:58:11 -0800

LLC, S-corp or continue as a sole proprietor? I've run a side freelance photography business for 4 years now and I expect it to become my sole income in the near future. I'm looking into the various types of incorporating and I'm wondering if I even need to or are the tax incentives worth the extra paper work and costs. I understand the idea of being shielded from liability but that's not the incentive. I don't have any partners so I'm unsure of the justification to go the s-corp route versus LLC. I've already established a business account but my earnings currently get lumped in with my 40-hour/ week job and my spouses earnings. Part of my desire to incorporate is to seperate my business earnings from my "family" earnings to make things a little easier at tax time.

(and I know I need to run all of this by a real live cpa but I'm just looking for some direction - thx)

Tax planning advice for the self employed.

Nothing — Mon, 26 Mar 2007 13:57:55 -0800

Tax planning advice for the self employed. The web is full of articles, the bookstores are full of guides. But there is so much "get rich quick" and "pay zero taxes" crap out there that I am not sure where to go for good, solid tax planning advice. Is it better to operate as an LLC? An s-corp? What expenses are deductible? What is a good system of recordkeeping? What records should be kept? If I have two related business pursuits, should I keep track of them separately or together? And so on. I know I need to see an accountant, but I'd like to be as educated as possible. Right now I am paying a rather high percentage of a rather small income in taxes. I'm not anti-tax, but I am very pro-eating.

So, what books do you recommend? What websites have accurate, useful articles? What has helped you better understand managing finances as a self employed person?

Duh, Inc.

zackola — Mon, 05 Feb 2007 14:14:46 -0800

Why do companies incorporate in DE, and have we done something incorrect by doing so when our primary place of business is NY? A friend and I recently came upon an opportunity to potentially sell some software we wrote in our spare time. In order to deal with us, the company we were talking to needed us to be properly incorporated. (Which we knew we needed to do anyway)

So we talked to a few friends, and one of them was gracious enough to help us out in choosing the correct structure (s-corp), and file most of the appropriate information. They advised us to incorporate in Delaware and so we also got set up with a holding company.

I recently met with an accountant (CPA) because we are at the stage where we want to make sure we have all our ducks in a row, as well as do tax planning for 2007.

Here are some facts. I live in Manhattan, NYC. My partner lives in California. Our primary place of business will probably be New York, but we will almost definitely have another client in NJ. When I told the CPA about this, he seemed a little shocked that we were advised to incorporate in DE. His advice was to dissolve the DE company before any business takes place with it, and reincorporate in NY.

He said if we really wanted to, we could stay incorporated in DE, but it seemed like the main reason he didn't want that was because we would have to apply to NY state as a foreign company to get the authority to do business in NY, and file a DE tax return. We would rather not dissolve the DE company, since we already paid for the holding company and the DE incorporation costs, roughly $300.00. We would end up spending about $700.00 to dissolve and reincorporate in NY.

Here are my questions.

1)Why do people incorporate in DE?
2)Can anyone recommend to us what to do (stay incorporated in DE or dissolve and incorporate in NY?)
3)Isn't it fairly common practice to incorporate in DE? My full time employer is incorporated in DE, but has offices all over the world, as do tons of companies listed on the NYSE, etc.

Thanks. We should have talked to a CPA before getting this far into it and potentially wasting some money, but oh Internet! Help us figure out what to do! (Get a second opinion is a valid response)

Should my wife and I (with drastically different incomes ) file taxes together or seperate?

Anonymous — Mon, 29 Jan 2007 21:00:29 -0800

TaxFilter: My wife and I have drastically different incomes. She made about $45K this year and I only made about $15K, mostly from freelance gigs, so no taxes were paid. Should we file jointly or married but filing separately? I have my own business so I have deductions for travel and some equipment purchases. However, my income is so low I am not sure if they will matter much.

So is it better if we use my income to drag down the average between us or should I file myself since I basically have paid almost no taxes?

The only job that has taken out taxes for me is a consulting firm that took $400 in Federal Income and $415 in social security tax on $6700 in income. So that leaves almost $10K with no tax paid.

I should also mention I recently moved to NJ so basically no state tax was taken out at all (I think I have paid about $20 in state income tax from a part time hourly job in Dec). However, my car and drivers license are still based in Florida, but my address I will be filing the insurance will be NJ. How does this affect things?

Health insurance and taxes

bad grammar — Wed, 24 Jan 2007 13:36:03 -0800

How do I "incorporate under my business" for the purpose of deducting health care costs from my income as a self-employed person? How do you "incorporate under your business" if you are self-employed and wish to deduct your health insurance costs from your federal income tax? Last year I searched the IRS site for some information about this process, but it was not helpful.

Do I have to get a business license, develop a business model, etc.? I am a free-lance writer and temp, not an MBA.

I Google "business license" and find sites where you have to pay upwards of $175 for a license, but some of these sites look dodgy.

Taxing a reinvesting business

blueplasticfish — Tue, 28 Nov 2006 14:42:12 -0800

Can I start a LLC (or similar) who's only business is to manage investments and reinvest any gains? What are the tax implications? If I always reinvest all the gains and dividends of the investments my theoretical net income will always be 0, right?

However, I am sure there is some way I (or the company) would have to pay taxes on this. What would the taxes be, and how can you be taxed if you have no profit? Or, would there be a profit? If so, how is this calculated? Can you be taxed if you reinvest the gains and never take a distribution? What are the different implications for different legal stuctures (LLC, S corps, C corps, etc)?

I will eventually seek legal and CPA tax advice on this matter, but wanted to feel out the Mefi community first.

A Taxing Question

popcassady — Sat, 23 Sep 2006 08:45:21 -0800

UK: I've thought of a way to earn a little pocket money. Will the taxman be bothered? I have full-time job. I also have a great idea.

I would like to make a little money in my spare time. I would be doing business directly with my customers.

Now, if this enterprise ends up earning me a few bob, at what point would I have to tell the taxman? Do I have to tell the taxman? Would I have to register as self-employed?

Deadline for claiming small business expenses on income tax

rinkjustice — Tue, 17 Jan 2006 11:28:58 -0800

I'm a Canadian who has very recently bought a pre-owned computer for a business I'm starting. Can I claim it in the upcoming income tax? Should I have registered the business first, and then make the necessary purchases? What is the deadline for claiming small business expenses on income tax anyway?

Can I bargain with the IRS?

Anonymous — Thu, 24 Nov 2005 22:27:12 -0800

In 2001, my .com finally imploded in the week after September 11th, when our few remaining clients went out of business. For another couple of years the corporation continued to exist, with me as sole employee, though it was only an after-hours interest -- I've long since moved on from doing anything with this corporation. It's existed only on paper for the past two years while I've paid the IRS, out of my own pocket, some payroll taxes (941 withholdings) that my accounting errors led me to underpay. They (and I) have just noticed that I forgot to file for the Q3 2001. It seems that I paid $6,000 to employees in that final quarter, so I figure my business owes the IRS another couple of thousand dollars in taxes. Now what? I don't have a couple of thousand dollars to throw at this, and the corporation's bank account is all but empty. Can I bargain with the IRS? Will they give me any bonus points for coming forward and telling them about this? Is my moral obligation to personally pay this debt sufficient that I should just buck up and set up a payment plan? What happens if, worst case, I just shut down the corporation? Please don't tell me to consult a tax attorney. Yes, that would be the best thing to do, but if I had the money to consult an attorney, I'd have the money to just pay off the IRS and be done with it.

Income tax question for an LLC

limitedpie — Tue, 24 Aug 2004 11:51:58 -0800

If one has a business that is registered as an LLC (with no partners-- just the one person) and if: the business location (office) is in one state, the owner lives in another state and most of the business (or clients) are in a third state in which state is state income tax due-- where the office is, the owner's residence or where the clients are?

Taxation and Reporting for eCommerce

lilboo — Thu, 12 Aug 2004 08:31:41 -0800

Ecommerce filter: Here at work we are attempting to understand/define the default business rules for taxation calculations within an ecommerce app. Specifically we are all tied up in knots over the application of rates, reporting issues, etc. Is there an industry standard for handling this aspect of a transaction? Who defines the standards, and how can I find out more about it?

Starting a very small business.

shotsy — Thu, 29 Jul 2004 17:56:01 -0800

I am thinking of starting a very small business, but I have a few questions for those of you who have done so before I really make up my mind wheter to go forward or not. [More Inside] I'd like to start selling original t-shirts over the web, essentially. My goal is not to get rich, just to get a little extra change and also to get some t-shirts I'd want to wear. Hobby meets Cash. I've looked over some of the previous threads on setting up small business, but none seemed to quite address my questions.

A bit about my plan: Start with small runs, maybe 50 prints each of two designs, see how they sell, then react accordingly.

1) I've looked into the process and there are a lot of custom printers out there, and if anybody has experience in that area, I'd appreciate a reccomendation.

2) Taxes: I don't see myself making all that much money on this venture, but I don't want to play games with Johnny Law, so I am wondering how difficult figuring this stuff out will be. Do I need to officiate myself as a company or anything?

3) Advertising: I'd love to hear the good and bad stories of internet advertising. How does it usually work? I'd obviously target sites that cater to people with similar aesthetic ideals, but I'd love to get a rough (or very rough) estimate for how much I should expect to budget for that sort of thing (though I understand it will vary wildly by site).

4) Any other tips on things I haven't thought of would be appreciated.

I realize I've thrown a lot out there, so please just answer parts if you can. Many thanks.