taxes

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ride5150

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so im licensed and insured and mobile, should i be charging tax on my services? do you guys charge tax?
 
ObsessiveAutoDetail said:
Depends on where you live. Some states require sales tax collection on services, some do not.
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do you know where i could find the info for this?

wait so how does it usually work, i have to give the state some money after each sale? or do i pay it all when i do my taxes?

i just dont want to be doing my taxes later and have to pay out of my pocket.
 
It does depend. Unless you are selling a product then you wouldn't charge Sales tax, but there may be a Use tax. You would want to ask your accountant to know for sure. It varies state by state and the law is constantly changing.
 
ride5150 said:
do you know where i could find the info for this?

wait so how does it usually work, i have to give the state some money after each sale? or do i pay it all when i do my taxes?

i just dont want to be doing my taxes later and have to pay out of my pocket.
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You will most certainly be paying out of pocket either way. I would set aside at least 40-50 percent of what you earn to pay when tax time rolls around unless you have an accountant to help you save. And that isn't even counting if you have to calculate use tax for your state. You are going to want an accountant to help you deduct as many of your expenses as possible so the amount you have to pay is as low as possible. It is just another one of those costs of doing business.
 
I live in Michigan. I have to collect sales tax on any merchandise I would sell, but not on services (yet). You'll want to contact a CPA or at least familiarize yourself with your state's sales and use tax requirements. This information can usually be found on your State's official website.
 
theres another thing im not really clear about, i have a business license that i got from my city hall, am i LLC?
 
In Wisconsin, services are taxed as well. To find out, contact your states department of revenue.
 
ride5150 said:
theres another thing im not really clear about, i have a business license that i got from my city hall, am i LLC?
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I'm not sure if there are any qualified CPA's or business lawyers on here, I am not. You seem to have quite a few questions and as a new business owner, you should.

In order to make certain you do not miss anything which might leave you exposed to tax or other liabilities, I would recommend you seek the advice of a certified individual (CPA or lawyer) in your city or town that is familiar with your local tax and business codes and regulations.
 
Check with your state department of revenue for sales tax information. Your city business license just allows you to do business in the city. It doesn't define the type of company you have. You likely need to incorporate or register your business with your state as either a sole proprietorship, LLC or Corporation for tax purposes.

Generally you will need to pay:
1. Sales taxes on your detailing jobs. Either add this to the price of your detail or state "tax included". But either way the state gets their cut.

2. Income taxes on the rest of your detailing income. This is either added to your personal income on your 1040 and state returns, or filed separately on a different tax return for your LLC. It would be a --very-- good idea for you to make an appointment with a CPA / tax accountant to ensure you're set up properly, based upon the questions you're asking.
 
detailgod said:
what did you apply for? LLC, Corporation, D.B.A.?
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im not even sure. i went to my city hall and bought a business license, it doesnt say LLC or anything like that on it. this is starting to get frustrating :xyxthumbs:
 
ScubaCougr said:
Check with your state department of revenue for sales tax information. Your city business license just allows you to do business in the city. It doesn't define the type of company you have. You likely need to incorporate or register your business with your state as either a sole proprietorship, LLC or Corporation for tax purposes.

Generally you will need to pay:
1. Sales taxes on your detailing jobs. Either add this to the price of your detail or state "tax included". But either way the state gets their cut.

2. Income taxes on the rest of your detailing income. This is either added to your personal income on your 1040 and state returns, or filed separately on a different tax return for your LLC. It would be a --very-- good idea for you to make an appointment with a CPA / tax accountant to ensure you're set up properly, based upon the questions you're asking.
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yeah i guess ill have to talk to a CPA...ugh there goes some more money.

well i see that the state fee for LLC is $500...wow. there has to be a way around that, especially if im home based...

are any of you registered as sole proprietorship? this would make more sense to me since im the owner/operator and have insurance.
 
ride5150 said:
yeah i guess ill have to talk to a CPA...ugh there goes some more money.

well i see that the state fee for LLC is $500...wow. there has to be a way around that, especially if im home based...

are any of you registered as sole proprietorship? this would make more sense to me since im the owner/operator and have insurance.
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The LLC really doesn't offer any tax advantages. It really just shields your personal assets in case of a lawsuit or if the business fails... I have a sole proprietorship right now and general liability insurance.
 
ride5150 said:
theres another thing im not really clear about, i have a business license that i got from my city hall, am i LLC?
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Just having a business license doesn't structure your company. Unless you are legally structured then you are just a DBA/sole proprietor. You can't just start slapping letters like LLC or INC behind your business name unless you are legally structured that way and have filed the paperwork. You really need to head to a library and pick up a book on starting a business. Having a business license is important, but it doesn't protect you or your personal assets from lawsuits. There are plenty of books on it. Get the LCC for Dummies book on Amazon. It is a great place to start.
 
ObsessiveAutoDetail said:
The LLC really doesn't offer any tax advantages. It really just shields your personal assets in case of a lawsuit or if the business fails... I have a sole proprietorship right now and general liability insurance.
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did you have to register anywhere as a sole proprietor? im on hold right now with the illinois secretary of state...i hate all this tax stuff i just want to detail some cars already:P

OCDetails said:
Just having a business license doesn't structure your company. Unless you are legally structured then you are just a DBA/sole proprietor. You can't just start slapping letters like LLC or INC behind your business name unless you are legally structured that way and have filed the paperwork. You really need to head to a library and pick up a book on starting a business. Having a business license is important, but it doesn't protect you or your personal assets from lawsuits. There are plenty of books on it. Get the LCC for Dummies book on Amazon. It is a great place to start.
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i wont do LLC, i have liability insurance for 300k and am mobile, i think a sole proprietorship combined with my insurance will be ok.
 
ride5150 said:
yeah i guess ill have to talk to a CPA...ugh there goes some more money.

well i see that the state fee for LLC is $500...wow. there has to be a way around that, especially if im home based...

are any of you registered as sole proprietorship? this would make more sense to me since im the owner/operator and have insurance.
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You probably don't have an LLC you just have a license to operate.

My LLC cost me almost a grand when all was said and done. I set aside 30% of my sales for my yearly taxes. But in MA there is no sales tax on services.

I also went and talked to a CPA. Most will give you a consultation for free. Then they charge after that. I have found that having a CPA available is very helpful. I keep track of all my own expenses, sales, etc using Peachtree accounting software. That I had to go to my CPA to help me figure out. I just bring them a copy of my file at the end of the year and they file my taxes for me.
 
OCDetails said:
Just having a business license doesn't structure your company. Unless you are legally structured then you are just a DBA/sole proprietor. You can't just start slapping letters like LLC or INC behind your business name unless you are legally structured that way and have filed the paperwork. You really need to head to a library and pick up a book on starting a business. Having a business license is important, but it doesn't protect you or your personal assets from lawsuits. There are plenty of books on it. Get the LCC for Dummies book on Amazon. It is a great place to start.
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Good advice, along with setting down with a CPA or an attorney.

OP...another excellent source is: Detail King

Good luck in your venture....Bob
 
SeaJay's said:
You probably don't have an LLC you just have a license to operate.

My LLC cost me almost a grand when all was said and done. I set aside 30% of my sales for my yearly taxes. But in MA there is no sales tax on services.

I also went and talked to a CPA. Most will give you a consultation for free. Then they charge after that. I have found that having a CPA available is very helpful. I keep track of all my own expenses, sales, etc using Peachtree accounting software. That I had to go to my CPA to help me figure out. I just bring them a copy of my file at the end of the year and they file my taxes for me.
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yeah i just talked to a CPA over the phone, as a sole proprietor i just have to register my DBA name and keep track of my business expenses, and register w the illinois dept of revenue.
 
FUNX725 said:
Good advice, along with setting down with a CPA or an attorney.

OP...another excellent source is: Detail King

Good luck in your venture....Bob
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detail king? who would i contact? i just gave them a call and the guy told me theyre only a supplier.
 
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