Question?

[RumbleFish]

Hey guys
i was wondering if anyone knew the legalities of a small business. Does anyone know if i can start a business with a DBA, and get my tax id number and be able to keep my business taxes seperate from my personal tax. Someone told me i have to incorporate, but i dont think thats right. Please help if you know thanks.

[Mike2]

I have a small business that was a sole proprietorship until 2002 when we became a Limited Liability Company (LLC). As far as taxes go, if you have a sole proprietorship, the business fills out a schedule C, that is then brought into you personal 1040 tax form. All of the business stuff is contained in the schedule C, but the income (or loss) from the schedule C is combined with all of your personal income, and then taxed. Also, the schedule C income will be subject to Social Security tax which is 15.5% with some income limits. In a sole proprietorship your social security number is your federal ID.

The reason we became an LLC was to limit liability to the business. Before, if we had a car accident or some other mishap while on business, not only could the business be sued, but they could have come after me personally. Now the liability is limited to the business. In Wisconsin it costs $130 to become an LLC and you can do it online. You then fill out a form and call the IRS to get your federal Tax ID number.

Good luck on your business venture.

Mike

[RumbleFish]

Thanks Mike you're a huge help. Thanks so much!!!!!!!

[RumbleFish]

If your canadian can you still open a company in the states, i have a SSN, and i work here, on a visa, just making sure everything is legal.

[MIke2]

My knowledge on this subject is limited to my experience, and you are well beyond me on that one. I bet there is a good accountant that follows this board that can answer this question.

Mike

[RumbleFish]

Thanks Mike,I think its ok. Just making sure, dont need to go to jail.

[MK]

You can do it either way and their are benefits and troubles with each. I've had both for different reasons in different lines of work. Depending on the business, you may really need to incorporate primarily for liability reasons, that is, to protect your personal assets such as home, car, savings acct., etc. On the other hand if you dont need the Inc., there's a LOT less paperwork with the sole proprietorship. Do it right the first time and talk to a good accountant. You can talk to a lawyer but most of them just say incorporate whether you really need it or not.

If you do it one way and then decide to change it later, it might draw the attention of the IRS and that's trouble whether you have anything to hide or not.

[RumbleFish]

Thanks guys, i appreciate it. I wish i had a good accountant to talk too?

[MK]

Talk to a local business owner that you know and that has been in business for a while and ask for a recommendation. Get a referral from someone. Try to avoid your cousins neighbor that works out of his basement on weekends. A good full time CPA office can help you. It wont be cheap, but its cheaper than doing it wrong and then having to hire them to fix it.

[John]

Very good advice from the prior posts. I have incorporated twice with prior businesses. Trust me, if you don't have to incorporate, you don't want to! Talk to a good accountant--it really depends on the type of business you're starting, and how much exposure to liability you might face. The LLC entity is an attractive setup these days, if that fits your situation.

[RumbleFish]

Its a company that wont involve any accidents. Im orders produt frm my home and its shipped from somewhere else. Its simple and the product wont cause injury. I think the DBA is the way to go.

[Bobfest]

I'm a CPA (who'd rather be a pro fisherman LOL)and can tell you about some of the advantages either way you choose. Let me know if I can help.

[RumbleFish]

Bobfest
Thanks.
I got my EIN today from the IRS. I set up my business bank account and i think im ready to roll, let me know if there i anything i should be careful of when just getting started? Thanks in Advance.

[Mike2]

Hey Rumblefish - have you discovered Quickbooks yet? I would be lost without it.

Mike

[RumbleFish]

Thanks, ill go get it.

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[SWeed]

Regardless of what info you get here check with a local attorney or accountant. Get a refferal from someone you know, then they are responsible in the long run..... I wouldn't go to a Dentist for a sore toe therefore I don't go to a fishing discussion board for legal advice..... Good Luck in your venture......

[RumbleFish]

Ya i talked to an accountant. I got it all set up thanks everyone.

[robert (bracketpro)]

rumblefish!good luck with your new business.stay focused,stay grounded and above all stay true to your self and to your customers.take care--robert

[RumbleFish]

Thanks Robert it means a lot.