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Opinions Would Be Great!

Discussion in 'Business & Tax Advice' started by Junior82, Dec 20, 2016.

  1. Junior82

    Junior82 Newbie

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    Hi BHW!

    I'm new to this community and hoping to share some information I learned while running my business. I have an online business that I started 10 months ago while having a full-time job. I recently resigned from my company to put more time into my current business that generates double my salary. I haven't registered my business and don't have an accountant. I been keeping track of my own books with quickens (very easy) and plan to do my taxes with my business income and my full-time job I had this year. Next year will be filing taxes just with my business income or filing jointly with my wife. Here are some questions if you could give me your opinion:

    1. I'm going to register my business with legal zoom. Should I go the LLC or DBA route? it will be just me running my business.

    2. Should I file my business separately or jointly with my wife's full-time job income for tax purposes? Best way to save on taxes? I'm using quicken books and will export my taxes to turbo tax every quarter I'm assuming?

    3. When naming my business should I use my website name or a generic name like Junior82? I don't want people seeing all my websites under my business name.

    4. Once owning and operating an online business what legal things should I be concerned about? Should I use legal zoom attorney consultations for questions?

    Any other things I should be aware of regarding business operations, taxes, legal, etc. would be great. I'm asking these things because some people on here I notice are accountant by reading their threads. A lot of people on BHW are running successful businesses.

    Thank you & God Bless!
     
  2. Junior82

    Junior82 Newbie

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    Any advice guys? Thank you!
     
  3. gtull2

    gtull2 Power Member

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    1- LLC to protect personal assets from potential liabilities.

    2- Seek a good CPA when tax time comes. You want a creative on that gets off on deductions. You need a shit ton of receipts. Save receipts on EVERYTHING that you do. I never buy anything that is not business related. Somehow, as if magically, everything is related to my business. Wink, wink. Get it?

    3- Generic.

    4- The fear is personal liability. Protect your assets by proper business formation. Protect your ass by not breaking laws. There are always exceptions, but legal zoom lawyers tend to be lawyers that are desperate. If you have a legal question, ask around to find "the guy". Pay him a fixed rate for 30 minutes of his time.
     
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  4. toml3030

    toml3030 Elite Member

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    I think you're a little confused here. DBA is the name that your business is known to the public. It doesn't have anything to do with ownership structure. If it's just you, running a DBA as sole prop is fine, as long as you file and pay your taxes. If your business income comes to the point where you'll realize significant tax savings by paying yourself a dividend, it's time to incorporate.

    Generally you save on taxes by filing as head of household on joint tax return.

    You legal name (your name or your corporate name) doesn't have to be the same as your DBA name. For example, I can have TomL3030 Inc as the legal name for TomL's Dildo and Sex Toy Emporium.

    Generally not much, unless you have lots of assets. You can buy a $2 mil product liability insurance for like $500 a year. The most important thing is to keep good records .
     
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  5. RuthSam

    RuthSam Jr. VIP Jr. VIP Premium Member

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    Find a local CPA to help you setup your business. If you are doing that much money it is 100% worth to get an professional to help you set this up from the very beginning rather than relay on some online service and a blackhat forum!
     
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  6. Junior82

    Junior82 Newbie

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    Thanks guy! I know It's better to ask an accountant/lawyer but many people on here are running successful businesses, so I think it's good to get facts.

    So if I register my company junior LLC , should I put I'm doing businesses in another name like if I owned blackhatworld dot com I would put that website? I don't want people seeing who owns my businesses.

    I notice LLC has flexible tax reporting options... do I have to pay quarterly taxes? Lets say that quarter I didn't make much profit... can I pay the next quarter?

    Should I have legal zoom take care my business compliant?

    Thanks again!

     
  7. gtull2

    gtull2 Power Member

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    Hey Junior,

    When people ask if they should organize as an LLC or DBA I assume that most consider a DBA as a sole proprietorship (99% are thinking that way). So I assumed that you were asking if an LLC or a sole proprietorship would be best. I definitely recommend LLC.

    If you want to complicate matters to make it harder for people to track you down, you can form an LLC as let's say "Bob, LLC". You could then form a DBA as "Tim's Unlimited". So the site could show that it's owned by Tim's Unlimited, while Tim's is just a DBA of Bob, LLC.

    But that seems like a lot of trouble. Maybe you have a need to hide really well?

    I practice in Louisiana. Every state has its nuances. Here it is very simple to form a LLC and a DBA. It's just a matter of filing a few papers with the Secretary of State's office and the Clerk of Court. Extremely simple.

    You should be able to file the LLC paperwork yourself, and then create the DBA. You should then be able to get the paperwork to open a checking account under the DBA and LLC name.

    Yeah quarterly taxes is right. If you're smart, your receipts will probably show that you lost money. Yes, you can pay taxes the following quarter. It's nothing to worry about unless you are earning big $ (don't you know how to get receipts?).

    Why legal zoom?
     
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  8. toml3030

    toml3030 Elite Member

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    You could, you can add extra layer of privacy by doing things like having multiple LLC's. (It's legal for LLC to own another LLC) or having a multi-party LLC in a state that doesn't require filing of who the owners are.

    There are multiple taxes that need to be paid at different times. Federal and state income taxes need to be filed and paid yearly. Sales taxes are filed and paid quarterly, unless the amount is big then it must be filed monthly. Taxes on wages are filed every payday. You must pay the taxes on time.
     
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  9. Junior82

    Junior82 Newbie

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    Thank you for answering my questions! I understand I can get it filed through my state. Maybe I been reading so much it looks more complicated then it is, so I just wanted to use legal zoom. My main business is online that brings in great revenue and I have other websites that bring in some decent cash flow. I just wanted to make sure If I register my business name as Junior LLC all my other websites can't be found if someone wanted to know who owned it and other websites I own.. I guess I'm a little paranoid.

    For taxes lets say I gross 45K a quarter and I spend money on adverting, product cost, etc. and I spend 35K that quarter... do I pay a lot of taxes? Is it possible to get money back being self employed. I been using quicken books which I fine to be easy to log all my receipts in. Going into 2017 with a successful business I just want to know what I'm getting myself into like tax advantages, not being sued, etc.

    I know people will say go see an accountant/lawyer, but anybody with experience I'm all ears! Thanks
     
  10. Junior82

    Junior82 Newbie

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    Oh geez, I notice people don't charge sales tax on there websites... I just charge sales tax if they are from where my business is from... is that right?
     
  11. toml3030

    toml3030 Elite Member

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    Taxes on income is paid on a year to year basis. If you make a net profit of $10K a quarter, and lose $8K in the other 3 quarters you pay taxes on $2K. Basically tax savings come in from the fact that dividend payouts from a company is taxed at 15% and ordinary income is taxed at 25% on $100K a year. For example if you have a net $100K profit, as a sole prop you'll be paying 25% or $25K a year in taxes (It'll actually be less but we'll keep it simple). If you own an LLC or a S corporation, what you do is pay yourself a reasonable salary as the president of the corporation, let's say $50K a year, and pay yourself the other $50K as a dividend so your taxes are $50K x 25% + $50K x 15% = $20K


    It's the same as a corporation. You have the right to deduct all business related expenses from profit. Don't be too aggressive in deducting profits and you should not have a higher risk of being audited.
     
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  12. toml3030

    toml3030 Elite Member

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    You are supposed to collect sales taxes in all states that you have a physical presence in. For example if you are registered and operate out of New York but your ship address is in California, both states will want you to collect a sales tax.
     
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  13. Junior82

    Junior82 Newbie

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    Every store that sell products, I notice they don't charge sales tax. If I go to flippa marketplace and check some stores that are doing 6 figures a year they don't charge sales tax. Is that something that is mandatory? Now I realize I need an accountant... I'm not paying myself a set salary besides using it just for bills and living expenses and my business. I guess that is why you need a personal and business banking account? I just feel like since I been operating this business for 10 months I don't even know where to start to tell the accountant things. Should I register my business first or see an accountant? Thanks again!
     
  14. FormerBoxer

    FormerBoxer Regular Member

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    If you have a successful business going I would go the LLC route. I use quickbooks self employed myself and never had a problem with the IRS. Sometimes I will not pay my quarter estimated tax and just pay it the next quarter. I would use a generic name like Junior82 and list other websites you plan on doing business with under that name. I run many eCommerce stores and I don't charge sales tax. Maybe you're supposed to but I did notice myself most don't. I don't think someone can find all your businesses under your LLC but I could be wrong.
     
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  15. toml3030

    toml3030 Elite Member

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    A lot of those online stores are either small enough so that if the state comes after them, the can close down and reopen, or are based offshore so they don't give a rat's ass.

    If I go to a really ghetto part of town, I see lots of crimes and very few of those criminals are arrested and punished. Does that mean I shouldn't follow the law? The state takes the stuff seriously if you get on their radar. If you don't make anything, then the state won't really care.

    Paying yourself a salary is done when you go the LLC or S Corp. route since IRS says you can't just transfer corporation's profits to your personal assets. The corporation must pay you a fair wage as an employee before it pays you a dividend as the owner. As a sole prop, this doesn't matter, because your business and you are considered a single financial entity. If you have an LLC or an S corporation, you and your business are considered separate legal entities and you MUST keep all your financials extremely separate between business and personal. If your personal and business funds are co-mingled it leads to what is called "piercing the corporate veil" and you will lose all legal protection and rights of a corporation. I have seen attorneys attempt to pierce the corporate veil over a single check written 5 years ago.

    You can go into a CPA for a consultation for a flat hourly fee and go from there.
     
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    Last edited: Dec 22, 2016