start-up questions

Discussion in 'Starting a Business' started by czechchick, Apr 10, 2011.

  1. czechchick

    czechchick
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    Greetings to all:

    I have decided to promote my services and make my income as an independent contractor (teaching a language, translations, etc), but do not know how to start. These are my questions:
    1. What kind of money do I have to make before I have to start paying taxes?
    2. Who (and how) is going to know that I have reached that income if I am paid through PayPal or personal checks?
    3. If I do have to declare taxes, how do I do that? Do I admit to every penny I have made? When and how do I pay the taxes?
    3. Do I have to establish a new bank account to link a PayPal to and deposit the checks?
    4. Is there a point when I should register myself as a business (I am in the process of creating my own website)? Why?
    5. Is there a comprehensive guide/book I could get to help me answer these questions? (With a two year old son constantly at my side I simply cannot stop and browse the bookshelves and read extracts...)

    Thank you in advance for your time and input.
     
  2. Fergal

    Fergal
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    Welcome to Business Advice Forum czechchick, thanks for joining.

    Will your business be based in the Czech Republic or somewhere else? The regulations and taxes that apply to your business will largely depend on the country where your business is located.
     
  3. czechchick

    czechchick
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    clarification

    I am based in California
     
  4. Fergal

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    czechchick I'm not in the US, so sorry I don't have the knowledge to answer your questions. However, hopefully someone will reply, who has the required knowledge.

    One thing you should do is Contact your Local IRS Office, they should be able to give you specific answers and point you in the right direction.

    Also do you know any accountants that you could speak to?
     
  5. a.m.Flacuks

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    1. If you decide to work for yourself the bottom bracket I believe is $100.00 (i know very low)
    2. You Will have to report it on you tax return. I am not sure if PayPal has some kind of reporting system.( I would guess that there is some kind of provision for that in the terms of use for PayPal)
    3. The time and the way you report and pay taxes heavily depends on the type of the entity you select:
    - You can do it as a sole proprietor (taxes will be reported on your personal income tax return)
    - You can create an LLC or a Corporation (taxes filing rules vary from entity to entity)
    You have to report your revenues and expenses.
    4. It is always better to have a separate business account, that way it will be easier to separate business from personal activities.
    5. You should register the business with the city where you are doing business (if the city requires City Business License Tax) as soon as you start operating as a business. Depending on the entity type you select you may have to register with SoS, EDD, and get an EIN #.
    6. I can't recommend one book in particular, there are a number of nuances that must be considered in starting a business.

    Feel free to ask more questions.

    -a.m.Flacuks
     
  6. td2011

    td2011
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    Hello
    Maybe you can visit a citizens advice office that should provide these answers for you. This service usually comes for free in the UK though I don't know if it exists in the US. Good Luck with everything
     

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