Postal Letter

My husband and I have started our small business. What are we missing? HELP!?

My husband and I have started a small part-time business (pick ups and deliveries). It's only been running two weeks but the results are good. We're now beginning to think about name, tax issues, etc. 1- Should we be keeping receipts? Should we be writing them? What do we do with these at the end of the year (what form(s) do we file with them? We bought a new van - is this tax deductible? What else is? 2- What else do we need? Who do we have to register with? Do we need tax id numbers, permits, licenses? And where do we do this? 3- Can anyone recommend good resources to call or check out on the web? If anyone else is running a similar business, a small business or a home based business (and Uncle Sam knows) I'd appreciate the feedback. Please be as specific as possible - we want to set this up right. Thanks!

Public Comments

1. I'll answer what I can. Keep all records of transactions, in and out. You need to get some kind of license before you can form a business name ..if you want to make it legal. You can do this at a Court House. It can be done online but if you have no idea what you're doing then you better go to a Court House. The van is tax deductible if it's used in the business only. Keep ALL gas receipts and keep track of miles, that can add to more deductions on taxes. Tax I.D. numbers, permits and licenses ..like I said ..Court House.
2. You need to register your business name and get a tax number im not sure in usa but here its the dept of taxation. you need to decide what type of business to be e.g corporation partnership PTY LTD you should consult an accountant as he will know the best structure to pay the least amount of tax Bookkeeping is essential you need to keep a ledger of all incoming funds and reciept numbers (you need signatures on your copy of the receipts) dates etc you copy these into a book with columns -client name;date ;amount paid; cheque no; / cash amount and receipt number you also need to keep a similar ledger for outgoing funds and keep receipts for all the money you spend on your business you need columnc- Date ;amount ;paid by cash credit card);paid to recipt number this way you can balance your expenses and offset them agains your income you will also need to feep a record of how much you draw from the business as income and dates amounts etc this way your books will balance and you wont have state revenue chasing you. i hope this helps
3. OK, there are a lot of issues here and I would really recommend consulting with an attorney or CPA to help you with the specifics. They can walk you through all of the requirements from business filings and taxes to insurance and regulatory requirements. In general, a lot of these issues depend on the state and county in which you live. Most states have a Secretary of State website where you can check on business licensing requirements. Most states also require you to be registered to collect state and local sales taxes. You can search Yahoo for "sales tax [state name]" and you should find some information on that. Definitely keep your receipts. You should use, at the very least, a spreadsheet to keep track of your expenses and income. Uncle Sam, and possibly your state, will want to know about these. I really recommend using a program like Intuit's QuickBooks to keep track of expenses and sales - you can also setup invoicing and keep track of tax-related materials here. Plus, this gives you a good handle on profit and expenses! Your vehicle can be a tax deduction, but it depends on how you use it. Check out the IRS website for businesses at http://www.irs.gov/businesses/index.html Next, you should really consider insurance needs for your business. It sounds like you offer a courier service, and this can expose you to a lot of liability. Let's say you pick up a package that needs to be delivered in 30 minutes. You're 3 minutes from your destination and 10 minutes ahead of schedule when you get a flat tire. You're not too worried- you're going to refund the delivery cost. But then, the customer sues you because they lost a multi-million dollar deal. What happens then? This is not to mention insurance on your vehicle, the possible need to be bonded, etc. I really recommend checking with an attorney and a CPA to help you get started. Also check with your local chamber of commerce - they might help also. Best of luck!
4. First you should check your states website for information on doing business in your state. For example in florida it is myflorida.com. There are helpful links to other websites such as the division of corporations to register your business name and get a tax ID. Save all reciepts and give reciepts. Everything you puchase for your business will help with taxes. Call a CPA
5. Yes, you should be keeping all receipts. Go to www.irs.gov, you can get some information from them on what forms and other tax deductions that you qualify for. I believe if you are in your own business, it is best to have a tax id number, permits for vehcile, and also don't forget to check with your insurance agent on auto insurance. Some insurance companies have different types for policys for business if you are carring merchandise.