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Discussion Starter #1
Hey folks. I am wondering when is the best time for myself to obtain a buisness license. Is there a certain income point that I need to be at before I can get one? For example, do I need a buisness license if i'm making less than 5k dollars a year, and do I need one if i'm making over that. Also, if I do need to obtain a buisness license, what is the best way to do so? thanks in advance:thumbsup:
 

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I would talk to a tax accountant about the dollar amount. I have one as here in WA it is required if I wish to claim losses against my taxes. As for applying for one, again I can only speak to WA, but I just applied online through the State Licensing Dept. Cost me $25.
 

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alright, My uncle is an accountant. perhaps he'll know, if not i'll seek a tax accountant. I have found where i can apply for a license in NY. My next question is what kind of license is best? LLC, Co. or sole proprietership? and what do you have?
 

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alright, My uncle is an accountant. perhaps he'll know, if not i'll seek a tax accountant. I have found where i can apply for a license in NY.
If you accept money for your work you will need an occupational license. It is a fairly simple venture, as you show up, fill out a form, and pay the money. There may be defined licenses for certain areas. For example, you may need a city license, or just a county or province license. And, then there is the state with its requirements.

Some areas may require liability insurance. In Florida, in addition to the occupational licenses, if you install work, you need a Certificate of Competency. You may also need to file for a sales tax certificate. Many companies that deal with the trades will require proof of an occupational license.

My next question is what kind of license is best? LLC, Co. or sole proprietership? and what do you have?
What you are referring to is not a license, but how you set up your business. You have a choice of incorporating, or running it as a sole proprietor. Either way has advantages and disadvantages.






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In determining what type of business (LLC, Sole Proprietorship, etc,) it is best to talk to a business oriented lawyer and an accountant.

George
 

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+1 what GeorgeC said. I do know one thing, if you incorporate your business you protect your personal assets (like your home unless that is the place where you run your business) in the event of your company being sued. Of course if you are running a business from your home, then you may have a whole new set of licensing issues.
 

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Don't bother with a lawyer. I am a tax accountant in Texas. I am a Junior accountant and can't answer all questions. Disclaimer: This is not professional help and for further information you should hire a business tax professional.

I say you should tell us what you want to do and how you want to do it. You can sell furniture and not be a business. For tax purposes you can call it a hobby as long as it meets the IRS requirements for a hobby.

You will need to check with state and local authorities to determine license requirements before you decide to apply for any kind of corporation.

Becoming an LLC will protect all of your personal assets if someone decides to sue you but can be expensive in the long run. Corporations and LLCs are taxed at a higher rate than individuals. To mitigate the expense and increased taxes file for Scorp status.

If you are making more than 10,000 a year don't bother with the other options.

You can usually get a business consultation from one of the local accountants for under 100 dollars. It may cost more if you decide to have them help you file all the paperwork but they will help you decide how to form the business and all of the tax implications that go along with the business types.

I'd give you more info but I don't know anything about NY tax laws. Feel free to ask questions though.

Again, unless you are going not-for-profit do not bother with a lawyer. Don't bother with disclaimers about your products. 9 times out of 10 disclaimers are dismissed in court cases involving an injury.
 

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Don't bother with a lawyer. I am a tax accountant in Texas. I am a Junior accountant and can't answer all questions. Disclaimer: This is not professional help and for further information you should hire a business tax professional.

I say you should tell us what you want to do and how you want to do it. You can sell furniture and not be a business. For tax purposes you can call it a hobby as long as it meets the IRS requirements for a hobby.

You will need to check with state and local authorities to determine license requirements before you decide to apply for any kind of corporation.

Becoming an LLC will protect all of your personal assets if someone decides to sue you but can be expensive in the long run. Corporations and LLCs are taxed at a higher rate than individuals. To mitigate the expense and increased taxes file for Scorp status.

If you are making more than 10,000 a year don't bother with the other options.

You can usually get a business consultation from one of the local accountants for under 100 dollars. It may cost more if you decide to have them help you file all the paperwork but they will help you decide how to form the business and all of the tax implications that go along with the business types.

I'd give you more info but I don't know anything about NY tax laws. Feel free to ask questions though.

Again, unless you are going not-for-profit do not bother with a lawyer. Don't bother with disclaimers about your products. 9 times out of 10 disclaimers are dismissed in court cases involving an injury.
How on earth can you ever in good conscience give advise "Don't bother with a lawyer?"

I suspect that you will remain a junior accountant for a long time if that is your standard way of thinking.

George
 

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+1 GeorgeC. There's a reason why accountants get fill out forms(and get paid accordingly) while lawyers really wrestle with the tough issues of liability, mergers, and acquisitions. Lawyers are trained to protect clients and keep clients interests' in mind. Sure some bad apples spoil the bunch, but if you find an honest attorney he/she will help tremendously. Additionally, usually attorneys can advise on tax issues such as double taxation as in corporations, or pass through taxation as in limited liability COMPANIES (not corporations).

I would consult with an attorney and discuss filing the proper articles/certificate for corporations or LLCs.
 

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You don't need a lawyer for what he is doing. If he wants to spend wasted money for a small business he can. We do a lot more than fill in blanks. I've taking law classes as well. Lawyers are a great asset but not really in his situation. If he becomes the next Bill Gates by building whatever he is building then that's a different story.

He also doesn't need a lawyer to file any of his paperwork. Most can be printed at home and taken or mailed to the state for approval.
 

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Keep in mind that accountants and lawyers are professionals. Both look after their clients. I said see an accountant not a tax preparer.

The only lawyers allowed to give tax advice are tax lawyers and estate lawyers. Both of which come at a high cost.

Yes an LLC is not a corporation and does not have articles of incorporation as a full on INC but it can come with negative tax implications if not structured properly.

Go to the book store and read two books. One on becoming an Scorp and one on LLCs. Determine which is better for your situation and choose the person with the degree and expertise to handle your needs.
 

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GeorgeC said:
How on earth can you ever in good conscience give advise "Don't bother with a lawyer?"

I suspect that you will remain a junior accountant for a long time if that is your standard way of thinking.

George
Just like Opera, your taking the issue out of context. It is not that he should never in his life bother with a lawyer. He just doesn't need one for this. Local accounting firms help open businesses often. I have done it. You all have made it clear what you think of me. So, if I can do it anyone can.

Let's give the thread back to the OP.

Has anyone in NY opened a business?
 

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...I am a Junior accountant and can't answer all questions...

For tax purposes you can call it a hobby as long as it meets the IRS requirements for a hobby.

...check with state and local authorities to determine license requirements...

...LLCs are taxed at a higher rate than individuals...

I'd give you more info but I don't know anything...

...9 times out of 10 disclaimers are dismissed in court cases involving an injury.

Hmmm... about the only things you said that I really agree with are the recommendation to check with local authorities and the limited value of disclaimers.

"For tax purposes" the IRS says gross income from a hobby is taxable. Expenses may be deductible up to the level of income.

LLCs are not necessarily "taxed at a higher rate than individuals". I've been the sole member of an LLC for years and the bottom line from my Schedule C is simply carried over to line 12 on my Form 1040 and included in my adjusted gross income, taxed at my individual rate.

FWIW, I'm retired from industry and enjoy working a few months each year for a major tax-return prep firm (really busy lately!). One of the problems we (too frequently) encounter is clients who have been given bad tax advice by an accountant...
 

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Bad advice is all over the place but it helps to educate ourselves and not blindly go through life. I think people think they were given bad advice so they can blame it on someone else.

An LLC can make you pay more in taxes. It is not the same as a corporation and the rate is based on individual tax rates. If you are close to the next tax bracket because of your current income an LLC can push you into the next tax bracket. That is if you make money with your LLC. That being said an LLC is a great way to form a business but so is an Scorp. As an Scorp you can file taxes as an LLC limiting your tax exposure. An Scorp also is fully disconnected from you. A person during an LLC can still sue the owner. An Scorp is it's own tax entity and it's own legal entity. It provides the best protection against lawsuits and taxes.

My advice wasn't bad. I told him to see an accountant in his state. I also said he should read up on it.

There is a reason all my information and suggests are vague. I'm not getting paid and I don't know the laws in his state. I simply stated what I would do in his situation.
 

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PPBART said:
Hmmm... about the only things you said that I really agree with are the recommendation to check with local authorities and the limited value of disclaimers.

"For tax purposes" the IRS says gross income from a hobby is taxable. Expenses may be deductible up to the level of income.

LLCs are not necessarily "taxed at a higher rate than individuals". I've been the sole member of an LLC for years and the bottom line from my Schedule C is simply carried over to line 12 on my Form 1040 and included in my adjusted gross income, taxed at my individual rate.

FWIW, I'm retired from industry and enjoy working a few months each year for a major tax-return prep firm (really busy lately!). One of the problems we (too frequently) encounter is clients who have been given bad tax advice by an accountant...
Next time I'll say CPA.
 

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GeorgeC said:
Oh, how naive and self important is our modern youth.

George
Well, I've been in combat several times and got an education after serving eight years. Naive? Maybe so, but my wife and family can tell you I am the last one to ask for or accept recognition. I worked hard to get here and will continue to work hard. I'm the jack of all trades and master of none.
 

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Man this thread got harsh fast. I too don't see any need to go to a lawyer for tax advice. That has nothing to do with the original question. And come on, don't tell a guy he's going to remain a Jr acct. because of what he wrote in an online forum. That's just petty, if you disagree then you have your opportunity to voice that here. But making personal attacks degrades the integrity of the entire forum.
 

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Its not really that complicated. You need to ask around locally to get the correct answers you need for the specifics of what your needs will be.

You'll think the grass is greener on the other side but in reality it can be brown,spotty and full of weeds:yes:.

Good luck to you. But money says you'll stay where you are;).
 
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