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Business Opportunity - Website's for sale (In: I Want to Sell My Website)
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patrickh
Joined: Oct 05, 2001
# Posts: 2187
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Posted: 2003-Sep-19 19:34
I do freelance work, and have always just deposited the checks I get hear and there into my personal checking account and treat them like free money (bad, I know). I had been told if you dont make over $5,000/year additional income then you don't need to worry about it.
Well I am starting to persue more and more freelance work, and receiving another check today it made me think that I want to get my act together. I am just wondering what the absolute minimum needed to have your own business is? I basicly have "My Name Consulting" I do for SE stuff, and a few sites that I am going to sell some various things on (one is a store, and one is a pay-to-be-listed business directory). Ideally I would like to clump all three together under one umbrella, like "My Name Projects" or something.
One piece of advice I got was to get a seperate checking account for business transactions, so I think I am going to do that with just another personal checking account if I can get away with it. What else is needed in terms of tax id's or things of that nature?
Money is tight, so I don't want to spend money on things I don't need. Also, I don't wan't to pay an accountant to keep tabs on things if I don't absolutely have to. Another thing to keep in mind is I am still working a normal full time job, so all I am really looking to do is cover my butt so I don't get auditted or am doing anything illegal tax wise.
Any advice would be really appreciated.
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excell
Staff
Joined: Mar 19, 2001
# Posts: 14512
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Posted: 2003-Sep-19 20:48
This is a very country (maybe state) specific topic.
What you need to to is research your geographical laws for business set up requirements.
Where I am we have pretty crystal cut requirements for earnings (hobby business vs small business) how that applies to taxes and how to exist within it.
You need to look to what free advise is available from your taxation and small business entry point advisory centers in your location.
Hope that helps. 
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bhartzer
Staff
Joined: Jun 08, 2000
# Posts: 7042
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Posted: 2003-Sep-19 21:45
In the USA, you're required to pay self-employment tax (I think it's around 28%) on all the money you make as a freelancer. That includes income from affiliate programs, and money that people pay you as an internet consultant to work on their websites.
The easiest way to do this is to set up a separate savings account and deposit all the money into it. Then keep about 28% of it in there so you can pay taxes at the end of the year.
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patrickh
Joined: Oct 05, 2001
# Posts: 2187
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Posted: 2003-Sep-19 21:53
Thanks, Ill look into that and try to get the specifics.
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MMacGillivray
Joined: Eons Ago
# Posts: 82
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Posted: 2003-Sep-19 22:42
"In the USA, you're required to pay self-employment tax (I think it's around 28%) on all the money you make as a freelancer. That includes income from affiliate programs, and money that people pay you as an internet consultant to work on their websites."
Does this apply to overseas people trading in the USA?
Any pointers would be appreciated!
Cheers
M
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patrickh
Joined: Oct 05, 2001
# Posts: 2187
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Posted: 2003-Sep-19 23:11
I would imagine you only need to worry about the laws in the location your business is.
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sirduncan
Joined: Jun 15, 2000
# Posts: 481
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Posted: 2003-Sep-20 17:33
When we set up our business, we had the same questions. We went to the state department building and got a business license and with that - was able to open a DBA (doing business As) checking account.
Now that we have grown and there is quite a bit more money moving around, we are considering an actual 'business checking account' at our bank. There are fees (not like the free, personal ones), but there are other advantages too.
We have to file taxes each quarter (we sell product), but we don't sell locally so there are no taxes on that. However - end of year gets a little uglier for us. We have chosen to go with a H&R Block because I don't feel like dealing with it all. They file all of the correct forms and numbers and we stay out of trouble (and they take our money) :]
So for us, the bare minimums were a SSN (we used my wifes) and with that got a business license and with that got a business account. Viola - a business.
I also do several 'personal' side jobs and make a little money here and there too. We are starting to realize that a 'my projects' business might be easier and run everything through there. Otherwise - 4 seperate business accounts could get messy I think. And thats my 2 bits.
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RodB
Joined: Eons Ago
# Posts: 1435
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Posted: 2003-Sep-21 06:40
Does this apply to overseas people trading in the USA?
Generally the laws of your land of residence apply I think is the answer to this question.
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St0n3y
Joined: May 01, 2002
# Posts: 1620
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Posted: 2003-Sep-22 03:38
Hi Patrickh,
I had to go through all this a few years back. Like they said above, each state and county is a bit different but here is what I did/recommend.
Purchased a business license with the state as a Sole Proprietor. A business license is not required in every state, especially if you work from your home.
If your "business name" is just your name then your personal checking account will do. If your business name is "yourname projects" or "yourname enterprises" then you'll need to fill out a fictitous name statement and get a business checking account.
I recommend finding somebody to do your taxes. HR block will work but they do assemblyline taxes... they don't really look for ways to save you money. We found an account which we pay about $400 each year at tax time. We simply provide an outline of money that came in and expenses.
The benefit of all this is you can write off tons of stuff. I buy a computer every other year which gets written off. A portion of my utilities is written off as well as my phone bills. Every time I buy a pen or printer paper, ink, whatever I get to write it off. I can even write off some travel if it is a "business trip" (pass out a few business cards and you got yourself a business trip.).
I let my figure worry about the tax stuff and I just tell them what I purchased. Of course, the day-to-day accounting is done in house but that is easy enough because I don't have employees, only "sub-contractors". That saves a lot of money in taxes as well.
You can go 3 of your first five years "in business" with Zero profit before the IRS will care. This means that you can have more writeoffs than actual income. Of course if you go more than those three of five then the IRS will want to know if you have an actual business or just a hobby.
Hope this helps.
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hollynla
Joined: Sep 20, 2003
# Posts: 5
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Posted: 2003-Sep-22 13:18
Each state is different but here in Louisiana, I had to get an occupational license from my local sherrif's office. Then I had to apply for a state tax ID. Since I work from home as a sole proprietor, I did not need a fed tax id, occupational license, or actual business license. It was pretty simple really. As far as business account, I do have a business checking account and it has NO fees except for ordering checks, so that really doesn't cost me a thing either. Good Luck!
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insightstats
Joined: Dec 28, 2003
# Posts: 1
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Posted: 2004-Jan-19 20:15
I know this is an old thread... but in case anyone is listening; here's my two cents.
A great place to get free advice relevant to your industry AND your location is your local SCORE chapter. The Service Corps Of Retired Executives is exactly that; retired executives who give newbies advice on "getting their act together".
They more than likely will have someone you can talk to who has worked in your industry and can give you specific advice. It might be worth the time to make an appointment to get a lot of questions answered in a short period of time.
Check out http://www.score.org. Worked for me!
Hope this helps and good luck!
Dan
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AmeriClicks
Joined: Eons Ago
# Posts:
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Posted: 2004-Jan-19 20:24
The best advice you can get on this is:
Talk to a LOCAL accountant regarding your specific needs. Also if your situation is complex, you should confer with an attorney..
Jeff
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