Small Business Owners

[ryansride2017]

My wife and I are opening a small business and I need some basic advice from small business owners. For analogy purposes, think of the business we are opening as a 2-car taxi service. We will have 3 employees to start. This is the first time we have opened our own business so I have a few very basic questions to get my mind rolling. If you have some useful input, please reference your answers to the following question numbers.

1. How do you go about making your business name official?

2. How long does the process take to acquire a Federal Payer ID?

3. What is involved in being able to write your own payroll checks as opposed to having a company similar to ADP?

4. If I would write my own checks, how do you know how much in social security, medicare, etc. you need to take out of each check?

5. How do you know how much to pay in quarterly taxes?

6. How are operating expenses handled? For example, are the operating expenses subtracted off of the gross first (dollar for dollar), then I pay taxes on the remainder or are do the operating expenses a deduction similar to a personal tax return?

So many questions...

 

[rjundi]

You really need to talk to an accountant for tax q's.

1) Business names are registered with Secratary of State. Typically a simple form you fill out for LLC at least.

2)No idea

5) 1040ES is the form to try and decipher + related state one if appicable

6) Any expenses is deducted off gross then tax rate applies. So if you make $3000 but spend $2000 doing it and left with $1000 profit, you only pay $1000 as a taxed amount.

 

[Y_K]

EIN - Employer ID Number Form SS-4

Strongly advise against employees at this stage.

Strongly advise against running your own payroll at this stage.

Talk to a trusted CPA in your area.

As for a trade name, depends what you want. Simple DBA (Doing Business AS) is registered with your Business License - extra $5 to a $15 or so Master Business Application. As mentioned above, you can also register it with the Secretaty of State, if you want to protect it. You can also register a lot of few other things like that on a Federal level.
Compared to the Old World countries like France or Australia (g) it is super easy in USA. It is also super easy to screw up..

Added: Business phone line and business bank account will help a lot. Bank or credit union will open an account in your name where you could deposit checks written to your DBA, but you have to have the State Business Lisense with the UBI (Unified Business Number) or whatever is equivalent in your woods.

 

[Donald]

Originally Posted By: ryansride2017
My wife and I are opening a small business and I need some basic advice from small business owners. For analogy purposes, think of the business we are opening as a 2-car taxi service. We will have 3 employees to start. This is the first time we have opened our own business so I have a few very basic questions to get my mind rolling. If you have some useful input, please reference your answers to the following question numbers.

1. How do you go about making your business name official?

2. How long does the process take to acquire a Federal Payer ID?

3. What is involved in being able to write your own payroll checks as opposed to having a company similar to ADP?

4. If I would write my own checks, how do you know how much in social security, medicare, etc. you need to take out of each check?

5. How do you know how much to pay in quarterly taxes?

6. How are operating expenses handled? For example, are the operating expenses subtracted off of the gross first (dollar for dollar), then I pay taxes on the remainder or are do the operating expenses a deduction similar to a personal tax return?

So many questions...


Get Quickbooks for your business and payroll. It will handle all the deductions.

 

[crazyoildude]

go with an LLC. get a good cpa it is well worth the money...To find a good one ask him or her how much is 2+2 if he or she asks you what do you want it to be Hire this person on the spot.

 

[TooManyWheels]

As far as registering your business – Google Small Business Formation Structure. There will be numerous results, but they are all similar.

Here is the short version - You will want liability protection so you want to be either an LLC or a Corporation, meaning you will have to register with your Secretary of State, and the IRS. Your secretary of state, or city/county web sites, will probably have small business startup information also. At the Federal level you simply apply for an EIN online (the number is returned in seconds), and then start paying estimated taxes throughout the year. If you go with LLC, I should tell you that LLC is a state-recognized designation, not Federal. At the Federal level a husband/wife LLC is a Partership, so that is what kind of return you will file. If you are copyrighting or trademarking anything, that will happen at the Federal level also. At the local level there will likely be permits to deal with, once you have yourself established as a business entity. If there is insurance required, that will probably need to preceed the permit applications.

Once you are registered and have your EIN, take your registration papers to where you do your personal banking and establish a business bank account. Do not run your business out of your personal account, or you risk IRS trouble! I don't recommend establishing your business account with another institution, as it is somewhat difficult to move money across institutions to your personal account, or back the other way if you need to reinvest later.

If you will have an online presence, buy your domain name through either a registrar or the company you will host with.

Writing payroll checks – Quickbooks has a payroll service which you can subscribe to that will integrate with their package. It will do the calculations for you. I’m not particularly a Quickbooks fan- I have gotten Peachtree and although I haven’t used it, it seems more intuitive to me.

Quarterly taxes – there is a calculation form from the IRS. I find it very taxing (!), but at heart it calculates the prorated taxes based on your current earnings times projected end of year tax rate.

Assuming you are using cash basis accounting you deduct your out of pocket expenses as they happen. This happens on your business return, then the proceeds flow to your personal return. If you use accrual accounting, things get more complicated and you will probably want an accountant, but otherwise you can do most if not all of your bookkeeping without one.

 

[hattaresguy]

First step to opening a business is getting a good attorney and accountant. They will be your best friends and advisers as you continue.

You need to form an LLC, once you have one you get your federal tax ID number. You can DIY, but I never have I have always paid my attorney's to form them. Problem is if you make one mistake and get sued it can cost you a lot more than the attorney's fee's.