If I use my SS# as a tax ID, I don't have to register with PA as an official business as long as I fill out self employment taxes each year right?
Also do I have to file for a sales tax ID?
You have to register your business with federal, state, and local governments, especially if you are using a business name rather than your personal name.
Businesses can be taxed separately from your personal income tax, depending upon your business structure. The state will attach and enforce leins against you without compunction, if you fail to pay them their due.
Check with the state department of revenue, just to make sure.
Not arguing here, just asking...
My husband is somewhat familiar with self employment and he says all I need to do is fill out self employment taxes each year as a contractor.... why couldn't I do that? He says if I am not hiring employees or have an official business name that I don't want others using, that I would not have to register with the state as long as I do the self employment form each year?
And contractors don't pay sales taxes....
Where are you using your SS#? Are you using it so you don't have to pay sales tax when you buy products? I also live in PA, I have a order only shop in the back of my home. I did register with the state as a business, got inspected and got the sales tax #, however this is only for collecting sales tax, which nothing I sell has tax (I give the candles away with a cake) so I kinda feel it was a waste of time, and now I have to report my earnings quarterly. I don't have a federal # which is what vendors want for any kind of wholesale discount. Also, if you do get things tax exempt then you have to charge tax on it and report it, they want the taxes from someone. I guess you could call you local Small Business Admin. The one here helped me out a lot. I guess it just depends on how much you do in sales. Hope this helps!
The SS# would just be basically my "tax ID" for purposes of the DofAg licensing me.... they said it could be my SS# and then they just need that and zoning.
Are you doing a lot of business or is this just a hobby?
So then you are not planning to use a business name, but your personal name for the business?
Not arguing, either.
I had taken a class through the local community development organization on business start-up, and that is what they insist we do. I checked my notebook before I posted. Only going with what I was taught.
Right now its word of mouth.... after I get licensed I want to start advertising in bridal shops and stuff with business cards, etc.
Not sure how busy I'll be.
Yes that is true, but keep in mind if you register with the dept of ag, you might as well register as a business because you will have to be inspected and all that so you might as well get a name and advertise. Also, I was told it is better to be a business for liability and all that.
In Pa it is $70 to register a business name, I think it would be a lot easier for you in the long run to have a business name. Not just for advertising but also for doing you income taxes, to keep track of your expenses and income.
Right now I call myself "Cakes by Suzy" which in a way is a name but in a way its MY name as well.
Maybe I'll see how it goes the first year and register later??? My husband insists I can file self employment taxes for a home business.
I'm sure that you can without any trouble, but maybe just to be safe you should call your small bus. admin. I worked at a retail bakery for 11 years and did cakes on the side at home for a friend here or there but I never even claimed any of that because any money I was given I spent on supplies or got new pans etc. so there never was a profit per say. I just did all my registering and licensing (Inspection) within the last two years because we moved to a house we remodeled that we added the bake shoppe to and I quit my job. Plus I live 1 mile from the schools here and you have to bring snacks from a licensed-inspected place, and I get a few orders that way. I have a order only business, my insurance company didn't want to insure our home with a business (with hours and all that) unless we went to a WAY more expensive policy. Anyway sorry to ramble on... hope I'm helping some
If you are just starting out, you may find that your expenses are more than your income and you won't have to claim anything. Just keep track of every pan, tip, ingredient, etc.
I've been doing it by word of mouth and I know I've spent everything I've made and then some.... this past year esp I got a new Kitchenaid dishwasher and a second (cheaper) refrigerator as well as various and assorted other things (oh yeah a second, refurb Kitchenaid mixer and also dh got me a food processor...).
I'm hoping that most of my large expenses have been taken care of now... I did write just now asking someone who I can contact to find out more about registering as a bz or if I can just claim self employment.
Just a little input...I currently have a floral business in PA. I have a state sales tax # because I buy things tax free. I have a registered fictitious name also...at the time, I was told if you have your actual name in your business title, you did not have to register for a fictitious name. This could have changed as it has been ten years or so since I registered. Yes, if you do have a state sales tax ID #, you will have to file quarterly, or every six months regardless of whether or not you charge tax on your items. It can be done on the PA's website. It's nice to have a number because you can buy things at wholesale prices, without sales tax. My best advice would be to consult with an accountant...that's where we go to have our taxes done and he figures out all the details for me regarding what I have to file/pay per year. You may also find that you can write off all these expenses on your taxes. Hope this helps!
So...if right now I don't mind paying taxes (because volume is low) and if my name is in my business name (it is) then I should be fine for now, right?
I don't know for sure. A local accountant would be able to answer that for you. It would be worth paying them for a short consult. Peace of mind and all. That way, when your business grows, you are already in a routine and it won't be bothersome when your busy