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  (#1)
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Online Business Questions - May 15, 2009, 08:18 AM

Do I need to get a business license?
How would I file taxes?
I already applied for my EIN.
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  (#2)
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May 15, 2009, 08:41 AM

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  (#3)
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May 15, 2009, 09:00 AM

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care to share please?
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  (#4)
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May 15, 2009, 09:01 AM

Quote:
Originally Posted by Carnage View Post
Do I need to get a business license?
How would I file taxes?
I already applied for my EIN.
1. Depends on the type of business and the state you are "basing it out of". IE some S-corps, corps, etc etc base their joints outta DE - no state taxes I used to work for a company that was headquartered in MD, but they were licensed and shiz outta DE.

2. Get with HR Block (don't fuck with jackson hewitt) there's tons of different ways especially if the business is 100% online

3. EIN?? you hirin? You don't need one unless you are going to have employees..EIN = EMPLOYER Identification Number, but you can get one to be cool. If you're not hirin, your SSN will suffice and will be less confusing come tax time. If you are going to have employees, i recommend independent contractors...pay them cash or checks and let them worry about their own taxes + there'll be no payroll for you to manage and no benefits to provide

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  (#5)
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May 15, 2009, 09:27 AM

1) If you're selling a product and delivering it to VA, you need a license to collect state taxes and pay the piper. If you are selling a service, most services are exempt from state sales tax.

2) You file a 1040 with a Schedule C for your biz. TurboTax Home & Business is extremely useful if you don't have an accountant. But, an accountant is useful because they can let you know what all you can deduct with your business. If you are receiving income as 1099-MISC or straight income from selling a service, you will need to pay estimated quarterly taxes to both Federal and State otherwise you might get fined come filing time if you owe taxes. File 1040-ES for estimated federal tax, and 760-ES (I believe) for Virginia.

3) You don't need an EIN, for all of the reasons above. Unless you're hiring employees, or if a vendor you are buying from or selling services to requires an EIN, you don't need one. You just use your SSN since I assume you will be operating under a Sole Proprietership. If you are trying to get LLC, Incorp, etc, then you will need an EIN and the rules change.


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Nudist: If Ben isnt still riding me, then I need it
B: that sounds odd
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  (#6)
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May 15, 2009, 09:35 AM

Quote:
Originally Posted by ClemsonJeeper View Post
1) If you're selling a product and delivering it to VA, you need a license to collect state taxes and pay the piper. If you are selling a service, most services are exempt from state sales tax.

2) You file a 1040 with a Schedule C for your biz. TurboTax Home & Business is extremely useful if you don't have an accountant. But, an accountant is useful because they can let you know what all you can deduct with your business. If you are receiving income as 1099-MISC or straight income from selling a service, you will need to pay estimated quarterly taxes to both Federal and State otherwise you might get fined come filing time if you owe taxes. File 1040-ES for estimated federal tax, and 760-ES (I believe) for Virginia.

3) You don't need an EIN, for all of the reasons above. Unless you're hiring employees, or if a vendor you are buying from or selling services to requires an EIN, you don't need one. You just use your SSN since I assume you will be operating under a Sole Proprietership. If you are trying to get LLC, Incorp, etc, then you will need an EIN and the rules change.
100 of my sales will be online 100% of them. I guess I don't need the EIN. 99.5% of my sales are out of state.

All my payments are received via Paypal. Don't I have to seperate a certain % for my federal and state taxes?
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  (#7)
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May 15, 2009, 09:42 AM

Quote:
Originally Posted by Carnage View Post
100 of my sales will be online 100% of them. I guess I don't need the EIN. 99.5% of my sales are out of state.

All my payments are received via Paypal. Don't I have to seperate a certain % for my federal and state taxes?
If this is your crackberry thing, you are selling a service are you not? So you won't have to pay sales tax for the ones you sell in Virginia.

Estimated taxes are just that. So basically take your tax percentage for your income level, and then take the amount of income you made off the untaxed income from your business, multiply them, and there is a good stab at your estimated taxes.

For example, if you made 1000$ from Jan-March 2009 untaxed income from your business, and you are at the 25% tax level, you would owe the IRS approximately 250$ estimated taxes for Q1 of 2009. Note this is an estimate and will be high! Deductions and your own personal taxes play a factor in this as well. It could turn out to be substantially less. Since only a portion would be taxed at 25%, a portion at 15%, a portion at 10%. You won't really know until the end of the year, but I always highball the estimated tax payment. Also if your personal taxes you end up getting a refund every year (because of deductions, mortgage writeoff, etc), then you won't really need to pay estimated taxes since you are getting a refund anyway. You'll just get less of a refund at the end of the year. Perfect taxes = you get no refund and you owe no money. But that's pretty tough to get right on the money.

I say better safe then sorry though, I always pay quarterly estimated taxes even though I'm 99% sure I'll get a refund. If you end up owing taxes for a couple years in a row you'll start getting fined.

PS: I'm not an accountant and if you get sued/audited from using my advice uh, you can't blame me. DISCLAIMER!!


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Nudist: If Ben isnt still riding me, then I need it
B: that sounds odd

Last edited by ClemsonJeeper; May 15, 2009 at 09:49 AM..
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  (#8)
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May 15, 2009, 09:56 AM

Quote:
Originally Posted by Carnage View Post
100 of my sales will be online 100% of them. I guess I don't need the EIN. 99.5% of my sales are out of state.

All my payments are received via Paypal. Don't I have to seperate a certain % for my federal and state taxes?
Want some credit card processing? hit me up i might be able to get you a better rate than paypal.


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  (#9)
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May 15, 2009, 10:15 AM

Quote:
Originally Posted by ClemsonJeeper View Post
If this is your crackberry thing, you are selling a service are you not? So you won't have to pay sales tax for the ones you sell in Virginia.

Estimated taxes are just that. So basically take your tax percentage for your income level, and then take the amount of income you made off the untaxed income from your business, multiply them, and there is a good stab at your estimated taxes.

For example, if you made 1000$ from Jan-March 2009 untaxed income from your business, and you are at the 25% tax level, you would owe the IRS approximately 250$ estimated taxes for Q1 of 2009. Note this is an estimate and will be high! Deductions and your own personal taxes play a factor in this as well. It could turn out to be substantially less. Since only a portion would be taxed at 25%, a portion at 15%, a portion at 10%. You won't really know until the end of the year, but I always highball the estimated tax payment. Also if your personal taxes you end up getting a refund every year (because of deductions, mortgage writeoff, etc), then you won't really need to pay estimated taxes since you are getting a refund anyway. You'll just get less of a refund at the end of the year. Perfect taxes = you get no refund and you owe no money. But that's pretty tough to get right on the money.

I say better safe then sorry though, I always pay quarterly estimated taxes even though I'm 99% sure I'll get a refund. If you end up owing taxes for a couple years in a row you'll start getting fined.

PS: I'm not an accountant and if you get sued/audited from using my advice uh, you can't blame me. DISCLAIMER!!
That is true. I provide the services to unlock your phones. Not selling anything really.

How can I figure out my tax level? What if I make close to 10gs in 3 months?

What do I tax my take home pay only right?

Let's say at the end of each month I make about $3500 how much should I set aside for Federal and state?
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May 15, 2009, 10:46 AM

Sounds like you have a good business in the making. Good luck with everything!



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  (#11)
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May 15, 2009, 11:01 AM

Quote:
Originally Posted by Carnage View Post
That is true. I provide the services to unlock your phones. Not selling anything really.

How can I figure out my tax level? What if I make close to 10gs in 3 months?

What do I tax my take home pay only right?

Let's say at the end of each month I make about $3500 how much should I set aside for Federal and state?
Well, a good basis would be to look at your 2008 taxes. Whatever your taxable income is (after deductions) for your main full time job is (assuming you haven't changed anything) is a good base line. Take that number, and use it to figure out your tax level.

So, for 2009 lets say your taxable income is 50,000$ (for JUST your full time job) after deductions. That puts you in the 25% tax bracket. So for 3500$ EXTRA (non-taxed) income per month, that would be 3500*3 = 10500 untaxed per quarter. 10,500*0.25 = 2625$. Now, keep in mind you aren't paying the FULL 25% in federal taxes on the entirety of your income. So your actual taxes will be less than 2625$ that you owe for the 1st quarter. But like I said, I highball it, so I pay the full percentage and just recoup the difference at the end of the year as a refund. Virginia is 5.75%, so 10,500*0.0575 = 603.75$ you would pay virginia for 1Q. Again this is on the high end.

So to summarize:

for 10,500$ quarterly untaxed income @ 25% tax bracket:

Federal: 2625.00$ per quarter (1040-ES)
Virginia: 603.75$ per quarter (760-ES)

Of course now since you are legally paying taxes on this income, you can deduct a lot of things related to your business, but that is a different topic.

And yes, you only tax the actual money you made (you don't pay taxes on the money paypal makes off you). So if you charge 25$ for unlocking but only get 23.50$ you pay taxes on 23.50$.


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Nudist: If Ben isnt still riding me, then I need it
B: that sounds odd

Last edited by ClemsonJeeper; May 15, 2009 at 11:06 AM..
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  (#12)
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May 15, 2009, 11:07 AM

Quote:
Originally Posted by ClemsonJeeper View Post
Well, a good basis would be to look at your 2008 taxes. Whatever your taxable income is (after deductions) for your main full time job is (assuming you haven't changed anything) is a good base line. Take that number, and use it to figure out your tax level.

So, for 2009 lets say you stand to make 50,000$ for JUST your full time job) after deductions. That puts you in the 25% tax bracket. So for 3500$ EXTRA (non-taxed) income per month, that would be 3500*3 = 10500 untaxed per quarter. 10,500*0.25 = 2625$. Now, keep in mind you aren't paying the FULL 25% in federal taxes on the entirety of your income. So your actual taxes will be less than 2625$ that you owe for the 1st quarter. But like I said, I highball it, so I pay the full percentage and just recoup the difference at the end of the year as a refund. Virginia is 5.75%, so 10,500*0.0575 = 603.75$ you would pay virginia for 1Q. Again this is on the high end.

So to summarize:

for 10,500$ quarterly untaxed income @ 25% tax bracket:

Federal: 2625.00$ per quarter (1040-ES)
Virginia: 603.75$ per quarter (760-ES)

Of course now since you are legally paying taxes on this income, you can deduct a lot of things related to your business, but that is a different topic.

And yes, you only tax the actual money you made (you don't pay taxes on the money paypal makes off you). So if you charge 25$ for unlocking but only get 23.50$ you pay taxes on 23.50$.
Now the next question. Would you recommend for me to get a business name or register my business and then get a license? I should be able to write off hosting, advertising, etc....

I owe you 2 Jagerbombs.
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  (#13)
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May 15, 2009, 11:14 AM

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Now the next question. Would you recommend for me to get a business name or register my business and then get a license? I should be able to write off hosting, advertising, etc....

I owe you 2 Jagerbombs.
Haha, its no problem. This is all the crap I've had to learn running DCSportbikes.net and End of Time Software...

What do you mean by "get a business name" Do you mean Trademarking one? If so, that is a whole other business, and usually involves a lawyer and other costs.

You don't NEED a "business" entity to collect income, unless your vendors/clients require it. You can file business income as a Schedule C on your personal income taxes as a Sole Proprietor under your own SSN. And you can deduct business expenses the same way. But note, if you are a Sole Proprietor, you are PERSONALLY responsible for the actions of your business. If you fry someones blackberry and they sue you, and they win, they can go after your PERSONAL assets. This is why you set up a LLC or Corporation to protect your personal assets.

Yes your hosting fees, advertising fees, etc are all deductible.

BTW if I'm wrong on any of this, please someone call me on it! Learning process.


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Nudist: If Ben isnt still riding me, then I need it
B: that sounds odd

Last edited by ClemsonJeeper; May 15, 2009 at 11:16 AM..
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  (#14)
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May 15, 2009, 11:17 AM

Wouldn't you want to get a business name and apply for an LLC to protect yourself from a lawsuit. If you don't have your business as an LLC then you personally can be held liable.


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  (#15)
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May 15, 2009, 11:22 AM

Quote:
Originally Posted by ClemsonJeeper View Post
Haha, its no problem. This is all the crap I've had to learn running DCSportbikes.net and End of Time Software...

What do you mean by "get a business name" Do you mean Trademarking one? If so, that is a whole other business, and usually involves a lawyer and other costs.

You don't NEED a "business" entity to collect income, unless your vendors/clients require it. You can file business income as a Schedule C on your personal income taxes as a Sole Proprietor under your own SSN. And you can deduct business expenses the same way. But note, if you are a Sole Proprietor, you are PERSONALLY responsible for the actions of your business. If you fry someones blackberry and they sue you, and they win, they can go after your PERSONAL assets. This is why you set up a LLC or Corporation to protect your personal assets.

Yes your hosting fees, advertising fees, etc are all deductible.

BTW if I'm wrong on any of this, please someone call me on it! Learning process.
How much does it cost to setup a LLC. Even if unlocking blackberrys' is legal I can still get sued even if I put it on my site that I am not responsible for anything that happens to their blackberry after its unlocked.

Shlts so confusing Any recommendations or places I should go to and read up on stuff? I guess its time to start saving up receipts.
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