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Can I do work other than cash-jobs for other companies....?

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I'm not set up as a legal business yet, so I've just been doing cash paid jobs when I can get them.

If I want to start approaching other businesses to do work for them, do I need to be set up as a legal business to work with them? or can they cut me a check for each job I do for them without claiming it on their business taxes?

Just wondering because of the whole taxes thing...

Any insight on this would be a huge help!

Thanks everyone,

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Guest kenya

Start out legal, and never have to look over your shoulders.  ;)

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Guest YHC

This type of work is mostly labor and or services. After doing my research I found that all the shops around my area are paying taxes on the matrial when they order it. Then they sale their service as labor or production time. So when you make your invoice you would add the cost of matrial used then add what you want to make for your labor (profit).

If you do it this way you won't need a Employer Identification Number (EIN). You will only have to file a Doing Business As (DBA) at your local county building and file your business structure. Most small business choose Limited Liability Company (LLC) as their structure.

If you plan on reselling items that you don't make yourself then this turns your business into a retail store which will then require you to have the Employer Identification Number (EIN) to file sales tax. 

You can read more about this here: http://www.irs.gov/businesses/small/article/0,,id=99336,00.html

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Go legal, Don't try to weasel the system. When businesses cut you checks, they need invoices so they can claim it as a write off. Checks are traceable so i would not want to be non-legit accepting checks.

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the short answer is no you don't have to you would just have to claim that money on tax return as income

there is benefits to getting a tax ID number

one better deductions and less questions --  with a tax ID number you can take off the cost of ---- cutter -----pens ---- pencils ------paper ------computer desk ---- computer------software  --- vinyl --- shirts ---- gas --- mileage ---- % of electricity, water, cable phone, and floor space of your place - you use 20% of your house apt for you business that is tax deductible   anything that you bought in that tax year  is a tax right off even business meals

and you can get some supplies wholesale - and/ or you don't have to pay taxes on the supplies

NO TAX ID number --- explain why your took all the detections  and you cant get wholesale and you have to pay taxes

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Not only IRS ( State and City tax are due on all sales here in West Virginia if you install you will most likely need a license In most municipality's and all these have B&O tax here that needs to be paid each state has different tax structures and you need to be up on them you don't want to fall prey to trying to hide taxes the government agency's can be ruthless.

Dan

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I recently found out how ruthless they can be. I filed all of the necessary paperwork; obtained all of the required licenses; etc. Three moths later, I received a bill from the Louisiana Dept of Revenue for over $700. It seems that I was not aware that one is required to file a monthly sales tax report here. When I did not file them (as I had no initial income), the state somehow figured an "average" of what I probably earned and billed me accordingly. I had to go to the Revenue office and file ammended monthly reports for the missing ones. Luckily, the rep I spoke with was understanding and was able to rescind the bills.

Charlie

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... can they cut me a check for each job I do for them without claiming it on their business taxes?

:thumbsup:;) ;) why would any business not claim an expense. doing so would increase their net and thus increase their income tax  :huh: ??? :huh:

why would you care how they do their accounting?

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If you plan on being a sole proprietorship with no employees, you can use your SSN as your EIN.  We went back to a sole p because the state of TN hits corporate entities for 6.5% of net.  That and we have no employees.  Been there, done that.  When we need help in the shop, we use 1099 subs.  There is no state tax on a sole p, just a tiny county and city business tax.  If you're outside the city limits, all there is is a county tax.  In TN, everything applies to sales tax...Labor and materials, but a legitimate business will have a sales tax number and be exempt from sales tax on anything purchased for resale.

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The fein is only for company's that hire employees. other than that you would only need a state/county tax permit license etc as required by locality it differs by state and location.

Dan

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When I first purchased my plotter I used to just do a W4 as an independent contractor for business in my area that wanted to take a "write off". At the end of the year I'd file my 1099 income on a schedule C along with all the same deductions that a "legit" business subject to all the taxes and licenses would be able to deduct except without all that borderline criminal B.S. the local governments would like to see you contend with to do business.

I then went legit in 2009 and after jumping through more hoops than I care to recall just to occupy 1,500sf store. I made squat for that year due to all the government hands I had to grease and improvements I had to make to get ADA approval!

Since returning to gainful full time employment (back in banking again) in late December 2009 I cancelled EVERYTHING, went back to doing sign work in my home studio and began to do the W4 thing again. After all is said and done, I have to say that unless you have a store front that requires you to sit in the same spot all day you're much much better off setting up in the garage or extra bedroom and just going the W4 route. I still do jobs for the same large business I did when I was "Legit" and when license/insurance is required I have my crane guy deal with it for the same price I paid him when I had to do it all myself.

Take a tip from my observations, the guys that have spent the time and energy to get all their civic ducks in a row will always feel compelled to offer advice that leads you down their path and, the other guys I like to call "Pirate Sign Guys" would have you do the same. Fact is, as long as you don't screw the IRS or your customers and apply yourself when it comes to sales and marketing you'll make money either way. The only difference is, the "Pirates" keep more of it... ;o) 

RG

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I'm dealing with this now. I have a few businesses that will be writing off my decals and signs and I was wondering if I could just claim them under my SSN. However, should I claim sales tax for these jobs and set that aside for "tax time?"

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You can report these from the 1099 forms that the business send you under your regular tax returns if not enough for deductions if you had a lot of sales you would need to file a secdule c so you can take the deductions and only pay on the profits from the sales. you will need to pay sales tax or you will possibly be hit with penaltys and intrest that can be more than the tax. Our state West Virginia requires all business to obtain a state tax  registration certificate and tax be charged on all sales and be payed to the state tax department.

Dan

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Why not just get legit? It's not that big of a deal to go get a business name registered, sales and tax license and then notify your town if any that your doing business from home. So many people try to weasel the system and it's really making you look bad. People will catch on when you mention "oh make the check out to my personal name" or "i'd rather accept cash only". Sounds shady because it is shady.

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I am a first-time home buyer this year and I got the $8,000 tax credit. I received a letter from the IRS stating that I would have to repay the credit if over the next 3 years I: moved, rented my house, yada yada, or RAN A BUSINESS AT MY HOME ADDRESS.

My question is, I plan on starting up but as a side... could I get a license using a PO Box address?

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A couple of notes from my past experiences. I used to have a few employees when i ran a constructions company. The norm around here was to pay them as Sub Contractors, Everyone did it so I started that way. After about a year in Biz The administration in the Unemployment tax office changed. I got a friendly visit from the rep for our area one day. He asked why he didn't see any withholding taxes filed for the employees he had observed working on my job site. I explained they were Sub contractors that I 1099'd. He kinda nodded and said " what time do you tell them to be at work?" I said 7am. and what time do let them leave? I said 6 or so. then he asked me who decided how and what they worked on. I told him me. SO he proceeded to explain to me that If I tell them when and where they are to work, and tell them what projects they work on and in what order etc. that from the legal stand point they are employees not subs. As such i would be liable for any and all things involved with them. Liability wise on the job site and medically as far injuries etc. If they broke a $1000 window on the site I would be liable but my insurance would not be since I classified them as Subs.

So after that I got my ducks in a row and started the whole company and employee withholding and filed the quarterlies etc. Fortunately I did, because 2 months after that a new guy I hired fell off a ladder and landed on the hood of a customers 2004 Cadillac. My insurance covered everything or else they could have bankrupted me.

Now I am not saying everyone has to be the general definition of legit. To me Running as a DBA for a single man operation is fine. and you can still claim all the deductions you can for any other business if you file your schedule C. Talk to an accountant it's worth the money, or better yet get a hold of your local BBB they have free counselors that will be glad to help you explore your options. Either way you better be damn sure you some sort of liability insurance in place. Because if you damage a customers property during and install you can be assured that you are going to pay for it, no matter how great a deal you were giving them before. an example is the front window on a typical downtown store will cost in excess of $1K to replace, and if your sqeegeeing on a decal when it cracks, it's your baby.

Also you can probably register your business with a PO box, but nobody will ship or sell you anything without a physical address.

Kevin

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you can be legal without starting a full fledged business, just make sure you claim all the income. be a self proprietor file a schedule c with your personal taxes, you can write off expenses, and claim your income.  Use your last name in the business name and you dont have to file a DBA (doing business as)

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