questions about sole proprietorship

Discussion in 'Growing and Managing a Business' started by iPenguin02, Jun 7, 2013.

  1. iPenguin02

    iPenguin02
    uix_expand uix_collapse
    New Member

    Joined:
    May 21, 2013
    Messages:
    3
    Likes Received:
    0
    I'm trying to become a sole proprietor in la county california. I but have some clarification questions.

    I know I have to fill out a fbn form which is $26 and must be filed 40 days before I start business. I know I have to put an ad out 30 days prior.
    Here are my questions about this part.
    Should I file under my home address or a mailbox like UPS?
    I know I have to renew every 5 years. Is there any other annual fees?

    My second set of questions pertain to taxes. I know I have to submit a schedule c every quarter.
    Am I paying taxes even if I am losing? I'm obviously gonna be losing at first because of start up cost.
    How does it work if I report no income or loses in a quarters.
    I guess I don't understand the whole tax aspect if someone can explain that in detail would be great.

    Business bank account I kinda get it. If you guys have any advise or recommendations on who to use that would be appropriated.

    If I missed anything or have the wrong info let me know. Thanks in advance
     
  2. platnumcn

    platnumcn
    uix_expand uix_collapse
    Member

    Joined:
    Jun 16, 2012
    Messages:
    110
    Likes Received:
    8
    Info is something I am very bad at, but I had a question to ask. What is your business all about? I just was curious to know, as it seemed you are a first timer when it comes to business. So wanted to know what you are doing to get you detailed info on what you need to do.
     
    • Like Like x 1
  3. Ted

    Ted
    uix_expand uix_collapse
    Member

    Joined:
    Jan 3, 2013
    Messages:
    182
    Likes Received:
    164
    If you are running you business out of your home, then normally you would use your home address for everything. If you want your mail to come to a PO Box or if you want the business registered somewhere other than your home, then use that other address like a PO BOX at a UPS Store (they call them suites or units) or else go with a virtual office somewhere.

    You don't file a schedule C every quarter. You file it once a year at income tax time. The schedule C is a specific form that business owners use to report business income/loss on their Federal Income Taxes.

    I run a business in New York, not California, so my state tax requirements might be different than California's. Here in NY, most businesses pay sales taxes quarterly. You collect the sales tax from local customers on every purchase. Then once every 3 months we send that money to the NYS department of tax and finance.

    If you know that your business is going to be profitable and that you are going to be paying income tax, then it pays to make quarterly estimated income tax deposits. Basically, what you are doing is making four installments to the IRS that will hopefully cover whatever you are going to owe them in income tax. That way when it comes time to file your annual tax return, you will come close to breaking even on what you owe them.

    If you don't make those estimated income tax payments, then you can get yourself in a bind. If your company is profitable, you can get hit with a massive income tax bill when you file your taxes. If you spent that money and don't have it when it comes time to pay, then you are in a bind. In that situation you are going to end up paying penalties and interest and having the massive headache and fear of the IRS coming after you.

    All the questions you are asking here right now are questions you should be asking a local accountant, preferably a CPA. Find a local one and hire them. It is money well spent especially when you have no idea what you are getting into. They will tell you how to plan for all of this properly. Plus you will already know who to call when you need help, which will happen at some point.
     
    • Like Like x 1

Share This Page