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TOTALLY Lost and Confused!!!

    • 4 posts
    May 28, 2008 2:48 PM EDT
    Hi Mommy2two,

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    • 167 posts
    May 2, 2008 1:04 PM EDT
    If you go to the IRS site irs.gov you will see the steps that will tell you if you need to fill out for an EIN. It asks a series of questions and then it alerts you of your status.

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    • 13 posts
    April 30, 2008 4:53 AM EDT
       Hi. I`m new here.
       I want to turn my hobby into a business. I know I can be a successful business so now I want to make it legitimate.
       I`m in NY. I have been talking to a SCORE counselor and he told me to get an EIN and file the necessary information my tax forms using the section "C". That seems easy enough but when I read about EIN`s I don`t think that applies to me. I`m just going to be in business by myself and I`ll never hire any employees. Just me, myself and I. EIN`s seem more for people who are going to have employees. If it`s just me do I need an EIN?
       I also asked him about a business license but he seems to lean towards the EIN. Don`t I need a license too?
       If there are people here who started a home business in NY where you are the only employee, how do I go about doing it? Is there a step by step check list I can go by?
       ANY assistance would be GREATLY appreciated. Thanks in advance.
     
    Kimberly
     
     
    • 13 posts
    April 30, 2008 7:48 AM EDT

    Thank you both very much for taking the time to reply to my post. I appreciate that a lot.

    So I certainly need to get an EIN. At least that is one thing I can add to my check list.

    I`d be selling personalized button, magnets, key chains and candy wrappers. I`d be thrilled to profit $50 a month! I`d say keep it a hobby but everyone keeps telling me to make it a business, so... that is what I`m trying to do. But the less confusing and less expensive for me to start up the better. It`s not worth being totally stressed out over such a piddly amount of profits.

    Thanks so much!!

    Kimberly

     

     

     

     

     

    k

     

     

    • 13 posts
    May 1, 2008 1:29 AM EDT
    Thanks!!!!
     
    This is all pretty scary. Here I thought it was as simple as 1-2-3 but now I`m begining to think it`s going to be more stress then anything else. I never thought about LLC and libilities and things like that. YIKES!
     
    Thank you so very much for the GREAT information!
     
    Kimberly
    • 13 posts
    May 1, 2008 9:29 AM EDT
    Thanks everyone!!!
     
    I did get an EIN this morning as a sole proprietor since it`s just me and I have no plans in the future to hire anyone. If I do, or things get better then I anticipate, maybe I will down the road. But for now the EIN as a sole proprietor seemed best.
     
    I`m still wondering about the business license/certificate. My EIN is in my name. I don`t plan on doing business under an assumed name or anything like that. Yeah, I gave my new little business a name just to make it look nice, but I`m not going to use that as my identity. My identity is my name. Does that make sense? I think  I`m confusing myself. Ha Ha.
     
    Do I need a business license/certificate even if I`m not working under a "DBA" sort of thing? Meaning... does all businesses, regardless of what they are, require a certificate/license?
     
    I checked. I don`t need any permits, which is one less worry.
     
    I also don`t understand the sales tax thing. Do I have to collect sales tax from people who buy from me? Do I only collect from people who buy from me who are in the same state as me? How does that all work?
     
    I`m still just as confused, if not more, as I was before... except for now I have an EIN.
     
    Kimberly
    • 13 posts
    May 1, 2008 12:25 PM EDT
    Awesome! Thank you! The more simple the better for me. Thanks for the link too! I`m going to check it out.
     
    Kimberly
    • 13 posts
    May 2, 2008 4:01 PM EDT

    Thanks!!!! I do have an EIN now. I`m just trying to figure out if I need to collect tax and if I need a license.

     

    Kimberly

    • 13 posts
    May 3, 2008 12:15 PM EDT
    Thanks.
     
    I want to do this more so for extra "pocket money" so to speak. Yes, if I can make enough to pay a few bills from time to time that would be great! But if all I make are a few extra dollars for the little "extras" in life we can`t normally afford (rent a movie, order pizza, take the kids out for ice cream) is good enough for me. I doubt Bill Gates or Donald Trump have anything to worry about with me as far as business. Ha Ha.
     
    I would keep it a hobby, but I do need a lot of supplies so I was thinking making it a business might be more beneficial so that I can list some of my expenses to off set the profits.
     
    It`s all so confusing!
     
    Kimberly
    • 11 posts
    May 1, 2008 9:05 AM EDT
    Kimberly,

    There is a lot of good advice above on why you should get an EIN.  However, in the spirit of keeping it simple, you can always start as a "sole proprietor" - which just means you are an individual running your business.   Make a folder for your business expenses and keep track of your income. 

    Beyond that, you should determine if you have to collect sales tax and whether you have any special licensing needs for your product.

    You can always apply for an EIN later - after you determined that your "hobby turned business" is going to stick.

    - Skip



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