What is required to do for your company legally

SON1C

SON1C

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Mine will be part time, should I create an LLC? how exactly do I go about doing that? what about taxes? insurance? anything else im forgetting or don't know about?
 
You don't need to form an LLC if its just you doing it on the side you can do a DBA. You probably need to start at city hall clerks office for a business certificate. Then start a business checking account, Then insure your business at insurance agent, then if your going to use your vehicle for business you will need commercial plates. As for taxes keep track of all money you take in and save all your receipts and keep track of all mileage you use for your business. bring it all with you next year when you do your taxes. These are the steps to get you started there are some other things that need to get done but this will get you rolling. If you skip any of these steps your not starting your business off the right way.
 
What is a Dba? And what would I be looking t roughly for insurance and what are a few good companies to get quotes from? I currently am insured through geico but idk if they do this type of insurance as well?
 
DBA = Doing Business As. Insurance wise you could look into any agency that sells business insurance. I hear State Farm is a good agency to look into, I have mine through Liberty Mutual.
 
When I started my business my lawyer set up the LLC for me. I know you can do it yourself but I didn't have the time or knowlege. Then I called my accountant and he set up the tax id number and told me what to set aside for taxes. The SBA is also a good place to go for help it's free but they won't give you legal adviice. As for insurance call some agents and get quotes.
 
The point of an LLC is one of liability and to help separate your business assets from your personal assets. As far as taxes the most important thing is to prove you are trying to make a profit so the IRS doesn't deem you're small business a hobby causing you to lose precious deductions.
 
Sometimes I wish I didn't do all of that and didn't get screwed on my taxes just worked with cash especially if working part-time. I think insurance is kind of expensive, paying back taxes is expensive. but with insurance there is always that "what if" just make sure when you get insurance you see how much your deductible is too, I have a feeling people pay more out of pocket then actually file a claim. I think the insurance is general liability and Garagekeepers coverage.
 
I've read before if doing this part time could I make it a tax free hobby? Honestly I'd rather not jump through all of the hoops if I don't have to you know? and I doubt I'd be doing more than 20 vehicles a month max

what do you guys think?
 
Nothing is tax free, unfortunately. Hobby income is taxable but you can deduct your hobby expenses but only up to your hobby income. A loss is not deductible and any income above your expenses will be taxable.
 
if any of you were in my shoes, what would be your solution?
 
I'd test the waters and see how much business I was doing before I did anything. I can't tell you how many times there is a post "I'm thinking of starting a part time detailing business..."

Its a hard business to break into and get going. Everyone thinks that they have that special thing that they will do/offer and have the most successful business.

I'd try it for a month. See what kind of numbers/money your pulling in. Then see if its worth it. See what your cost/profit ratio is. Get quotes on insurance to see how much it would cost you every month. Insurance is expensive and you could basically be breaking even if your making a monthly payment to them and only doing 3-4 details a month.

If you get a DBA or a Tax ID #, your on the IRS radar. Now, I'm not saying to not pay your taxes, but IIWM, I would wanna see if I could make a go of it before I have to start filing quarterlies, and recording all of my income. There are a lot of people that start out without the DBA/Insurance/ID #'s and do fine. Once your business grows and you think you can make it (which is damn hard once you take into account ALL your expenses) then looking into going on the books.
 
:iagree: I have seen alot of people start this way especially a large percentage of people on craigslist and I've seen it with alot of people that do house cleaning. But i will say its hard to advertise a name of a business that you don't have, but getting your work through word of mouth is a good way to go
 
Forming an LLC varies from state to state as do the fees. If you are sued and loose, it eliminates liability to your business assets only and shields your personal assets such as home, etc.
 
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