LLC or Sole Proprietorship

[lillybella]

yes, I paid $500. with a membership to the Soapmakers Guild.

 

[lillybella]

Can't I just claim my on-line business & use my SS# as my business tax id #?

 

[eyebright]

Can't I just claim my on-line business & use my SS# as my business tax id #?

From what I've been told by others that you can use your SS# as a business tx id, but was advised that getting an individual tax # would be better to protect yourself from identity theft. It is also better to keep your personal and business taxes separate.

 

[lillybella]

Thank you, eyebright. I agree. I just need to do it. Do I still use form C to do my business taxes? I had to file an extension :sad:

 

[Lindy]

You should have a separate bank account for your business as well.

 

[christinak]

ouch, insurance $500 a year! I probably wont even sell that much in soap!

That is too much for a new business owner that is on a budget...like me The Guild breaks it down and if you already have insurance they charge you $400.00 for membership which really puts the price of the actual insurance in perspective!

I'm passing on the Guild for now and going with somwhere like RLI where it's around $200 and sometimes a little less!

 

[new12soap]

That is too much for a new business owner that is on a budget...like me The Guild breaks it down and if you already have insurance they charge you $400.00 for membership which really puts the price of the actual insurance in perspective!

I'm passing on the Guild for now and going with somwhere like RLI where it's around $200 and sometimes a little less!

Membership in the Guild for someone that already carries liability insurance is $100.

If you are getting a quote for insurance (anywhere, including the guild), make sure you compare not only cost but benefits. There are a lot of maximums and exclusions. Some won't cover sales over $5000 annually, many won't cover candles, tarts, home products or cosmetics at all. Do your homework!

As for using your own SSN for your tax ID, you can report your income to the IRS that way, but you will still need an ID number from your state to collect and pay your sales tax.

 

[sapone]

I plan to set myself up as a DBA here in MA. I spent a fair amount of time researching various business options last week and almost had a panic when I saw that LLCs were $500 a year to register and keep the paperwork up to date. I then found out that I can do a DBA for $25-50 for four or five years depending on my county (of course I have not figured out the cost for my county yet, but I at least got the basic information to get started).

Here in NY it was too expensive to become an LLC. I chose a subchapter scorp. I am incorporated but all gains, losses flow thru my personal tax return, I also file a corp return. So far, I feel I made the right decision since I did not want all of the responsibility to be on me personally. Even though inc. is not as protective as LLC, still better than a sole prop.

 

[pjfan74]

So....after a long and tedious process...I'm all official! I have a new updated and official logo a have my sole proprietorship established in the state of Maryland, I've registered my trade name, have by federal tax id and my sales and use tax for the state....ready to do business! Now...to get back to soap making!!

 

[melstan775]

Way to go pj! This was an interesting and thought provoking thread, I am happy to hear its moving along for you.

 

[Lindy]

Congrats!

 

[pjfan74]

Thank you all! Thanks for all of the information and helpful discussions!