I have some questions about starting a business...

[zippy]

I am starting a web site soon and I plan to make some money from it. Now, I will want it to be legal and a real business. I have a few questions that I hope can be answered from the immense knowledge of my fellow anandtechians.

1. At what point do I have to declare my site a business (when I make X amount of money)?
2. Do I have to make it a legal business or when I make money from it, do I just add that into the taxes I normally would pay in April?
3. How do I go about making it a legal business? (where do I go, how do I fill out the forms (I am a minor, do I have to have a parent sign on with me or have the parent be the official owner of the business?)

Any other information that would help me is also greatly appreciated. Thanks!

 

[The Stigenator]

well I can answer parts of it:

1. You can be a small home based business and not have to declare yourself as a "corporation"
however if you do so, you have to remember that a corporation also pays taxes.
2. I run a small tech service for people. I get refferals from people and get the job done. The pay is petty cash to me, however when it comes to tax time I put a part of my salary as the income from that business entity, which acutally is a "contractor" so I dont have to have a name.
The only thing is when you are a contractor and you file taxes you got to remember that they tax you a bit for that money you earned by yourself. This is where Corporation or LLC will help.

3. Check with your local laws.. normally you got to advertise yourself for 3 weeks in a major newspaper and then show the civic govt that you are legal and they will register you. It takes about a month or so.. I have never done it though. My tech support thing is just a side job. Pays for my fantasies.. infact most times if they pay in cash I dont even declare it.

 

[zippy]

Thanks good_guy.

So how would I go about making a web site (which is not contractual work at all. ) a business?

It would technically be a small home based business (I'm NOT getting office space...I have two uninhabited rooms in this house that I can do what I need to do from! ), so do I just add the money I get (say from advertising...) into the tax forms come tax time? My friend has a web site (check my sig) but he isn't really making any money for it, however, he just signed up with an ad agency ($8 CPM...not bad for something his size...he probably gets 25,000-35,000 pageviews a month nowadays) and he had to fill out a tax form when signing up. What is up with that? See, being a minor, I'm not familiar with paying my own taxes and whatnot, so I'm really quite in the dark here.

 

[zippy]

^TTT^

 

[Wangel]

Get a business attorney. I got one and it saved me many headaches. There are federal, state, and local laws you need to know. Zoning questions, tax issues, Social security questions, health benefits, etc. If you want to guess, go ahead and then you will be paying an attorney much more later to fix the problems and audit your books. I worked out a deal where this attorney bartered his services against mine. In my stated, bartering is OK, but tax must still be paid on the bartered value. Stay legal!

 

[zippy]

Wangel, this is a web site to be run out of a home office, not a computer store or something.

Hmmmm...really I'm wondering about taxes and whatnot...not zoning.

I think I'll give my local chamber of commerce a call tomorrow.