Missy_S Posted June 20, 2007 Report Share Posted June 20, 2007 I have a question for those who have a business set up. I've been toying with the idea of not being under the table anymore. Did you need a business tax ID to get started? I really don't know where to start or even what to do. I've been "under the table" for a few years now but I'm getting much more business than I ever had. DH is worried I'll make to much money eventually. Help please!!!! Link to comment Share on other sites More sharing options...
mrmquilt Posted June 20, 2007 Report Share Posted June 20, 2007 Hi Missy, I think it all depends on the state. I am in Ohio and all I needed was a vendors license and that number covers everything for me. At least that is what Ohio tells me, I won't believe it until I file everything for the first time. Our public library had a lot of good books that got me in the right direction. Michele Link to comment Share on other sites More sharing options...
Mary Beth Posted June 20, 2007 Report Share Posted June 20, 2007 one word Google!! go to google and search for your state and your county and even your city. Find out what you need to do in all places. I needed a business license from my city; had to register my equipment with my county because we pay personal property tax every year; and had to register my business name with the state and obtain a tax id number. I hate all of this because my business is so small and it costs me around $400 a year for personal property tax on my machine. I have an issue with being honest so I started out trying to do "what I think is right"...but sometimes I wish I wasn't so stinking honest. Link to comment Share on other sites More sharing options...
JudyL Posted June 20, 2007 Report Share Posted June 20, 2007 Missy: As MaryBeth said, you need to find out what all the requirements are. Whether you intend to make a little bit of money or a whole lot of money, my advice is to sit down with a reputable CPA in your hometown. They will know all the requirements for running a business in your area. Yes, there will be a charge for the CPA's time, but often, they will save you enough money to more than pay for their bill. Whether it's your first quilt, your first day or whether you haven't made a profit yet or not, if you're running a business, and you're not complying with the local rules (whether it's taxing or zoning or whatever), then you're breaking the law and it isn't worth it. If there are longarmers in your area who are playing by the rules and they find out someone isn't, they will turn you in and I've heard of it happening . . often! Comply with the rules and sleep at night without worrying about who's going to find out there's a businses being run out of your house. Link to comment Share on other sites More sharing options...
pigletaz Posted June 20, 2007 Report Share Posted June 20, 2007 I went to irs.gov and got my federal tax id number online in about 15 minutes. It is a provisional number, but once everything clears with them, they send you your official paper, etc. My town requires a business license and my homeowners association requires that I notify them that I am working in my home. The county tax assessor can help you get started too. Good luck! Link to comment Share on other sites More sharing options...
quiltmonkey Posted June 21, 2007 Report Share Posted June 21, 2007 I have to add on to pigletaz about the web site www.irs.gov It is a great place to read up on starting a small business. Tons of info listed there, and on-line training sessions. I was pretty impressed with that stuff (however, everything else pertaining to the IRS, I'm not too thrilled about, though...you know) lol Link to comment Share on other sites More sharing options...
ramona-quilter Posted June 21, 2007 Report Share Posted June 21, 2007 Besides the license and rules, a CPA or maybe even your local banker can help you get set up. You will probably want to set up separate bank accounts and credit card for your business; it helps to keep things straight. In California, quilting is considered fabrication labor and taxable. I charge tax on my quilting service, batting and thread. Then of course, I have to send that tax money to the state once a year. That's the state side. Then depending on how much you/your business make, it could impact your federal income tax. I'm with Mary Beth and JudyL, it is so much easier to follow the rules. I have also heard scare stories about quilters "getting caught" running a business without a license and the fines that go with it. Scary. Link to comment Share on other sites More sharing options...
pigletaz Posted June 26, 2007 Report Share Posted June 26, 2007 I got online and filled out one form at irs.gov - it took 15 minutes to get a provisional tax id number and about 5 days to get the official certificate in the mail = from the irs! They are so efficient about this, but some other things, whew! Also, it took 5 minutes to open a business checking account and get my trade name registered with the state - the bank did it for me! So, things are moving quickly even though my Freedom isn't here yet. Oh my. Also, I've got charity quilts booked when my machine arrives. I thought all this would literally take months, not a couple weeks. Link to comment Share on other sites More sharing options...
TerriVB Posted June 26, 2007 Report Share Posted June 26, 2007 I hope Iowa is as fast as AZ--I just filled out my form online today too--and my Freedom is all set up and running. Link to comment Share on other sites More sharing options...
Mari-Lee Posted June 28, 2007 Report Share Posted June 28, 2007 Missy -- You didn't say what state your located. You will need a Sales Tax I.D. to purchase pre-tax for re-selling. . . this applies to consumables like batting, thread, etc. You can purchase those items for use in your business without sales tax. You then will pay sales tax or show the amount exempt from sales tax on an annual sales tax filing for your business. Unless you have employees you will most likely not need to have an EIN -- a federal I.D. which is like a social security number, but for a business. If you are setting up a sole proprietorship and do not have employees you will most likely not need an EIN as its role is to file income tax. A sole proprietorship is taxed to the individual on your annual return using your social security number. This is a very general guideline. You can get a lot of information on the web page for your Secretary of State. Link to comment Share on other sites More sharing options...
judie01 Posted July 1, 2007 Report Share Posted July 1, 2007 Missy_S: There are mega pros & cons on this issue. It all ties in like an interlocking puzzle. Federal ID # will necessitate a State ID #. Question becomes to have an Inc., LLC, Subchapter S, or run profit & loss thru personal tax rtn. MD also has Personal Property Tax payments -- every single year that the machine is used. But that tax payment is totally deductible, and as a matter of fact: that quilter is fully deductible on a depreciation schedule (filed w/ your tax rtns.) over a period of years- your accountant will instruct. You need to decide after you do the research for corporations, LLC & different kinds of entities. then talk to spouse -- because what you decide can impact annual tax return---- then have conversation with accountant before you're in it hip deep ---- and you might want to talk to a couple of accountant"s other than the one who's done your tax return for 20 years! Check with other long armers or local quilt shop/s to see who they use. Most important thing: make sure YOU understand the benefits, liabilities, & consequences of the entity you chose. Good luck. Judie01 Link to comment Share on other sites More sharing options...
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