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    3 Replies Latest reply on Jan 10, 2013 9:53 AM by Moderator Melinda

    Tax question

    sagelady Wayfarer


      Starting my own senior care resource business. Just beginning to put it all together.

       

      If I get a tax ID number, does this mean I will have to file taxes even if I don't get the business underway this year? Wanted to have all my ducks in a row, so to speak. ie: tax id number. Business checking acct. charge card etc. So that if I am ready to maket my business and I actually obtained clients, I would be ready to go.

       

      But I'm alittle concerned that requesting these things would make me have to file taxes, even if the business wasn't making any money yet.

       

      Also do I need to file my business for state tax purposes as well ? I live in Michigan.

       

      Any help or thoughts would be appreciated. As this is all new to me.

       

      One last thing, I did check the IRS site. They mention " self employed" as a heading. Is this really what I would be classified as? I have a full time job ( RN in a Hospital ). This would be a small business, no employees. To help the community and fofill a need of both myself and the seniors in my area.

       

      Patty

        • Re: Tax question
          OfficeGoddess Navigator

          Let me try to answer some of your questions:

           

          If I get a tax ID number, does this mean I will have to file taxes even if I don't get the business underway this year?  You will need file a tax return, although with no income you won't need to pay taxes.  You can, however, write off any expenses related to starting the business!


          Also do I need to file my business for state tax purposes as well ? Check with your Secretary of State's office - they should be able to tell you registration and filing requirements for your state (and also check for county and city registration/filing requirements, as well.).


          They mention " self employed" as a heading. Is this really what I would be classified as? That depends on how you set up your business.  As a sole prop or llc, yes, you are self-employed.  Once your business starts earning money, if you are a llc or sole-prop you will need to pay both halves of the SSI and Medicare tax and your income would be considered 'personal' for IRS tax purposes.


          As part of the process of setting up your business, you will need to set up your accounting system.  I HIGHLY RECOMMEND that you connect with a CPA to help answer your business accounting questions.


          Lily Chambers

          The Virtual Office Goddess, LLC

          Author: How To Do Your Own Small Business Bookkeeping

           

          • Re: Tax question
            thedavid Adventurer

            It is best that you file a return and here is why: The IRS will not come after you for not filing a return BUT if you file a return in the following years, you will have to indicate the exact date that your business was incorporated (if in fact it was incorporated) THEN the IRS will come after you for not filing a timely return for that half year that you didn't even have income. The IRS wants you to file returns if if they are "zero" returns. If you did not incorporate then it is much easier to just add a "zero" income Schedule C to your regular personal 1040 tax return. Your tax professional will know what to do. I hope this helps, should you have more questions do not hesitate to ask

             

            David Ghazaryan

            Tax Professional

            Tax Services Las Vegas | Business Taxes | Income Tax by iQTAXX

            • Re: Tax question
              Guide

              Hi Sagelady,

               

              Congratulations on opening your business and welcome to the forum.

               

              I would suggest a good accountant. They will be able to answer all of your questions because not every state is the same and laws are constantly changing. You wouldn't want to make a mistake that will wind up costing you money in the end.

               

              Melinda