If your going to stick with it you should get and EIN# Employer Identification Number You can wright off your assets, expences.... You can incorporate for around $500-700 and save on the double taxation from your frendly federal govt. It also limits your liability. Insurance is a very good Idea also you usualy cant get comercial accounts without Ins. or without workers comp. Seek and accounts advice.
Is there a certain income threshold at which you are required to report income? Not sure if I got my info right, but someone told me ya don't have to report it until you are making x amount, but I don't know how much. I'm looking to register my part - time LCO pretty soon but really don't know how to go about it. Any advice?
Also, I think I need to do LLC, but not sure. How do you know how to organize? I do about 2 days a week as an LCO, so I'm no big - timer / can't afford a bunch of annual legal fees. What's my best route? Thanks.
unless you make more than $7800 per year (figure is for 2003 single individual) you will owe no taxes... the standard and personal deductions will bring you back down to $0 taxable income. However, it is my understanding that it is "mandatory" to file each year.
Increased deductions will obviously increase the above number.
Your dad, mother, buddy, friend, neighbor or somone you know has to know a accounant. Thats how I first got some info when I first started. My old man asked his accountant some questions for me and why not I was potential income for him. Now six years later he makes quite a bit of $ from me. Keep your taxes straight you dont want to mess with the IRS those boys dont play nice. Dont be fooled by the guy who tells you your to small to be audited it happens. The IRS rather go after the quick $ on a small co. than fight high $ attornies in tax court. I know guys that have never been audited, and one fella that gets audited every 3-4 years. Keep your records for at least seven years.
Your profile says you have been in business 8 years.
If you are working at a job and start a business part time, loss from the business can offset other income.
Not to mention gasoline or diesel used in off-road equipment (except off-road diesel) equals taxes paid, qualifying you for additional refund.
And the deductions you could have taken for your vehicle.
I would advise getting an accountant. You can still file past years, and will be given refunds if due for the last three years. Anything over 3 years old you won't get a refund even if a refund was due.
YOU ARE SUPPOSED to report all $ you make. EVEN IF it is just "part time". You can use your SS# if you are Sole Proprietor, otherwise get a FEIN. EVEN CRIMINALS are supposed to report their income from ILLEGAL OPERATIONS. On the upside, they can write off their expenses, gun & bullets for hit, etc. The only thing they ever got AL CAPONE for was tax evasion. Do you want to play games with the IRS? They are the only place in our legal system where YOU HAVE TO PROVE YOU ARE INNOCENT! They can come in and shut down your business for not paying taxes and it is UP TO YOU TO PROVE THEY ARE WRONG. Want to mess with them? I don't!