Business for Dummies- Please help!

cookiecutter

Sun, Jul 12 2015, 9:24 pm

amother wrote:

Hi,
I'm iy"H opening a small business from home, and need some help. I need to decide whether I'll be a sole proprietorship, corporation, non-profit, etc. What's the difference between all those? Thanks!

I don't know much about these questions but I'll raise some topics for discussion at least. I think the two biggest issues are personal liability and taxes. You don't want to be personally liable if some damage is caused by the business. You also don't want to be taxed BOTH as a business and as an individual who is paid by the business. Most (possibly all) states have an LLC type entity which allows you to operate as a business separate from yourself as a person, but which allows you the option of pass through taxation. Another potential benefit of being an entity (although I am not 100% sure how it works) is that you can pay yourself a smaller salary and cover the commensurate social security and payroll taxes, and take some amount of earnings as a distribution on equity, which is taxed at a lower rate and which I don't believe has social security tax attached. But I would ask a lawyer what the parameters of this are.

chatz

Tue, Jul 14 2015, 1:52 am

I started writing a post which I hoped to keep concise.. well, yeah right. This is too big of a topic to keep concise.

In short, google your city and starting a business. Click on the .gov links and read up a bit. Different states/cities have different requirements, but most places want you to start a business, so the websites tend to be clear.

In very, very short:

Not for profits = not trying to make money. think, tzedaka or public service organizations

Sole proprietorship = basic, simple business form. Easiest and fastest to start. Money coming in is yours. If the business owes money - that's you, too. Taxes go on your 1040 (schedule C) and your income minus business expenses is taxed a bit extra (for employment taxes).

Corporation = separate legal entity. Not you. Can have multiple shareholders (owners) or just one. Profits are taxed on the corporate level at the corporate rate. You get a regular paycheck.

S-Corporations - some states allow small corporations to become an s-corp. Basically, all the protection of a regular C-Corp but income is taxed on your personal 1040 at your personal rate.

LLC - sort of between sole proprietorship and corporation. Taxed on personal level. Not sure how it differentiates from an S-corp.

*TIP: no matter the form of business you choose, always keep separate business accounts - checking and credit card and anything else. Use your personal account for personal transactions and business account for business transactions

You should speak to an accountant about your tax obligations in whichever direction you choose to go. They can probably also help you with choosing a business structure and forming it.

You can pay employees under any structure but need to be registered to do so. Same with collecting sales tax.

much hatzlacha!

LOVELY19

Thu, Sep 03 2015, 2:47 am

Hi. I want to start a business and'ive [gentile] everything I need but just to get the word out. Im selling make up based in hendon cheaper than the shops. All I need help with is how to sell it tonpeople. I dont have the stock ay home but they can order what they want and I order it. Any help? Ideas how to spread out the word??