Wanting to start my own business?? Questions...

[Krueger81]

Hello,

I wanna start my own business and had a couple of questions first.

1. If the business will strictly be labor and no parts are being sold that I have to tax will I still have to pay taxes on the labor I Sold/had?

2. What is the best business to have in case is goes downhill I am not liable for anything meaning they can't take property/car?

I will add more questions as I get them in my head. 🙂

Thanks
Phil

 

[Raincity]

I see you have given this venture much thought.

 

[Krakerjak]

Independent Contractor: An Independent Contractor provides services to a company, but is not an employee of that company. The company pays the Independent Contractor without withholding payroll taxes or paying the employer's share of payroll taxes. An independent contractor has the right to decide how the work will be done and may hire others to assist or do the work. Independent contractors also do not receive wages. Independent Contractors are under intense scrutiny from the IRS and states because of abuses costing billions of dollars of taxes.

Does that help?
I don't know much about business, but I found it informative.

 

[Ornery]

On the plus side, you can have clients pay in cash, which could save a bundle in taxes. On the negative side, good luck getting loans when you don't show any income!

 

[axelfox]

LLC baby.

 

[techfuzz]

Originally posted by: Krueger81
2. What is the best business to have in case is goes downhill I am not liable for anything meaning they can't take property/car?

Limited Liability Company (LLC)

techfuzz

 

[Turkish]

Originally posted by: techfuzz

Originally posted by: Krueger81
2. What is the best business to have in case is goes downhill I am not liable for anything meaning they can't take property/car?

Limited Liability Company (LLC)

techfuzz

yup, best way to go.

 

[Spencer278]

1. If the business will strictly be labor and no parts are being sold that I have to tax will I still have to pay taxes on the labor I Sold/had?

Correct you only have to charge sales tax on items you sale and not labor. You also have to pay use tax on any item you purchase with out paying tax.

 

[Vette73]

LLC or Type S-Corp in some states will give the tax advantage of a sole proprietary but give the protection of a full corporation. Most states have the forms on-line and it is not that hard.

Now you still have to pay taxes on YOUR income. You also will have to Pay Social security, unemployment, etc?. There are a LOT of taxes and fees that have to be paid. Example the SS tax from your paycheck is only HALF of what is paid. The company has to pay the other half. So if you work for yourself you have to pay it all.

 

[CPA]

This is the second question I've had/seen recently about business and taxes. There is a misconception about sales taxes.

Whether you sell product or services you will have to pay income tax.

Whether or not you have to COLLECT and SUBMIT (notice I didn't say pay) sales taxes is based on your state's Sales and Use Tax Laws. All states are different. Contact your state Treasury or Revenue departments.

 

[CPA]

Originally posted by: CPA

Whether you sell product or services you will have to pay income tax.

Whether or not you have to COLLECT and SUBMIT (notice I didn't say pay) sales taxes is based on your state's Sales and Use Tax Laws. All states are different. Contact your state Treasury or Revenue departments.