Tax questions....help!

I am so confused as to what I need for next years tax's. I have my own room in a local salon, I book my own appointments, my customers pay me (not the salon). I don't get paid from the salon at all, just what I make off of my appointments. Saying all that, what exactly do I need to do in order to "show" income? Do I need a LLC, tax id #, separate checking account, business name (or can I just use my name) do I need to see an attorney or a accountant??? Any advice is greatly appreciated!

Replies to This Discussion

Permalink Reply by Monica Grajales on March 25, 2014 at 6:19am

Hi Keli

Since you are completely independent, it would be to your advantage to get an LLC. This way your business income and losses are separate from you as a person. If you ever go bankrupt or have other financial legal woes, it won;t affect you personally, just your business and vice versa.

You MUST have a tax id if you go the LLC route. Right now, you should at least be "DBA" (Kelli Shirey doing business as business name). If you don't have DBA status, that's the very least you should have. You should also have a separate checking account.

You can do it all yourself with no need from lawyer or accountant. For a small business, an accountant won't want to waste his/her time (my own experience). You would be better off with a bookkeeper to keep everything organized for you for when tax time comes.

I would go to the Small Business Administration in your county/city and see if they offer any counseling services for small business. In Tampa, FL, they offer it.

You can get your LLC yourself by paying the government directly. You don't need a third party and pay more money. You can also get Quickbooks online for your accounting system (about $12/month - tax deductible). You can also order your tax ID online and pay for it. Obviously, your business license, sales tax license should be in place as well. If you go the DBA route, you just go in person or online to the county/city and do it yourself as well.

In order to show income (which can be in the form of losses), you need to have ALL your receipts from all your business expenses and all your receipts from your earnings. If you file taxes online yourself (saving you lots of money - I use H&R Block online), the system guides you into what you need to report. You will need to report furniture and equipment depreciation. A bookkeeper can help you with that or you can figure it out yourself if you're good in math :-)

That's all I have. Sorry I wasn't able to provide more detailed help. Good luck!!