10alison

First - thanks to everyone for the great info and advice! I'm also just starting out with a tee business and am exploring what exactly I need to do as far as registering/incorporating/etc.

Quick question - I am leaning toward getting a Federal Tax ID # to avoid ever having to give out or use my SSN (the manufacturer who I'm buying wholesale blanks from requires tax ID or SSN and state resale #)--my question is, when i get these #'s, do I automatically have some type of tax responsibility? I ask this because I'm planning to start selling in Q4 08 and don't want to get myself involved in some early tax burden when I don't know where my sales will net out for the year. That's why I'm also hesitating in forming an official LLC, etc. - I'm working out whether to do these things now or wait until I have my feet under me as far as getting the business established.

Looks like from what I've been reading on these boards - I should be OK to start off with a Federal Tax ID, sellers permit, local license and sole proprietorship...LLC is not necessary?

Any advice is appreciated!

Thanks!

 

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shirt pimp

Quote: Originally Posted by 10alison First - thanks to everyone for the great info and advice! I'm also just starting out with a tee business and am exploring what exactly I need to do as far as registering/incorporating/etc. Quick question - I am leaning toward getting a Federal Tax ID # to avoid ever having to give out or use my SSN (the manufacturer who I'm buying wholesale blanks from requires tax ID or SSN and state resale #)--my question is, when i get these #'s, do I automatically have some type of tax responsibility? I ask this because I'm planning to start selling in Q4 08 and don't want to get myself involved in some early tax burden when I don't know where my sales will net out for the year. That's why I'm also hesitating in forming an official LLC, etc. - I'm working out whether to do these things now or wait until I have my feet under me as far as getting the business established. Looks like from what I've been reading on these boards - I should be OK to start off with a Federal Tax ID, sellers permit, local license and sole proprietorship...LLC is not necessary? Any advice is appreciated! Thanks!

the structure of your business is up to you...sole propietorship, LLC, C-Corp, S-Corp - none of that is really anyone's business to be snooping into, you just need to have your company formed in a legitimate business structure

 

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10alison

Thanks - I'm inquiring to see if anyone has any advice/thoughts as to the best/appropriate business structure to get off on the right foot.

a

 

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novanutcase

Quote: Originally Posted by 10alison Thanks - I'm inquiring to see if anyone has any advice/thoughts as to the best/appropriate business structure to get off on the right foot. a

My advice to you would be to not use an internet forum for advice on something as serious as this. Go talk to a CPA/tax attorney and ask them what the best structure would be for the business that you want to set up.

John

 

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10alison

Of course I will do that. I was simply trying to get a feel for any general practices that people already in the t-shirt business have figured out/adopted for my own knowledge.

Do you really think I would base my entire business model on the advice I get here, without working with a professional? Notsomuch.

Thanks for your comment.

 

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novanutcase

Quote: Originally Posted by 10alison Of course I will do that. I was simply trying to get a feel for any general practices that people already in the t-shirt business have figured out/adopted for my own knowledge. Do you really think I would base my entire business model on the advice I get here, without working with a professional? Notsomuch. Thanks for your comment.

Please don't take offense to my post. I merely am pointing out that, as great as these forums are for information, in matters where government agencies are involved it's best to go to a professional and have him analyze your situation and give you professional advice rather than someone giving their opinion on their own personal experience. What may have worked for them may not work for you. All I tried to say is for this subject it would be best to talk to a CPA.

John

 

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10alison

Thanks for your insight.

 

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Girlzndollz

Quote: Originally Posted by 10alison First - thanks to everyone for the great info and advice! I'm also just starting out with a tee business and am exploring what exactly I need to do as far as registering/incorporating/etc.

I haven't read back past this post of yours, so if you were given this link, my apologies for being redundant.

Here is a link to a free resouce (not free, paid for with all of our tax dollars, lol, so you might as well actually get some use of it), anyway, here is a link to find your local Small Business Development Center.

They are there to help you set up your biz and succeed. They can also give you advice/leads on what to ask the CPA so you use your time wisely when paying those dollars for that meeting. I have used them, and I can say they are an indispensable resource to me.

Here's the link:
Small Business Administration - sbdc_locator_map

Quote: Quick question - I am leaning toward getting a Federal Tax ID # to avoid ever having to give out or use my SSN (the manufacturer who I'm buying wholesale blanks from requires tax ID or SSN and state resale #)--my question is, when i get these #'s, do I automatically have some type of tax responsibility?

I have an EIN for the same reason you mentioned, shielding my SS#. My other buisness is not a taxable service, so that only leaves tax on income. Tax responsibility comes when you have something to pay tax on. Another consideration is clothing tax, not all states collect it, you'll need to take care of that if your state requires it.

The nice thing about talking with the SBDC and a CPA is because they can talk specifics of your biz and things that apply to you and doing biz in your region. Some locations have additional taxes, I believe Philly has it's own tax for folks doing biz there. You have to know everything that applies to you, and talking to someone local will help with that.

Quote: I ask this because I'm planning to start selling in Q4 08 and don't want to get myself involved in some early tax burden when I don't know where my sales will net out for the year.

If you start selling day 1 of 4Q, you will know what your sales for a period are after the period is over. I'm not sure there is such a thing as getting yourself involved in an "early tax burden". Business is business, if you are engaging in it, there's no early tax burden, only current tax obligations.

Quote: Looks like from what I've been reading on these boards - I should be OK to start off with a Federal Tax ID, sellers permit, local license and sole proprietorship...LLC is not necessary? Any advice is appreciated! Thanks!

Definitely talking to the SBDC will help you. After you learn from them what to do, you'll be able to have a good talk with a CPA and you will know what's right for you because you'll have the information you need to decide that. For some people it's SP, for others it's LLC, but it's the best when you know what each really is, so you can tell which is the best fit for you. I've seen posts on the board from folks saying they wished they knew more before they signed on for an SP or LLC, because once they were operating, they realized the set up wasn't right for them. Good luck to you, hope it goes well for you.

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Good luck and best regards, Kelly

 

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badalou

Quote: Originally Posted by novanutcase My advice to you would be to not use an INTERNET forum for advice on something as serious as this. Go talk to a CPA/tax attorney and ask them what the best structure would be for the business that you want to set up. John

Actually you gave him advice and it is on the forum. I must state though in a lot of cases a CPA is over kill. I have been around and in business a long time and have yet to ever need a CPA. A simple accountant can handle most questions. Most small business or sole proprietors who who work out their homes just need the basic licenses to start with. what is funny is my brother in law is a CPA and he even said this to me.

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www.heatpressessentials.com TEE SQUARE IT, LOGO IT! TEE PAD IT! www.tbiz101.com (New)Heat Transfer Education

 

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novanutcase

Quote: Originally Posted by badalou Actually you gave him advice and it is on the forum. I must state though in a lot of cases a CPA is over kill. I have been around and in business a long time and have yet to ever need a CPA. A simple accountant can handle most questions. Most small business or sole proprietors who who work out their homes just need the basic licenses to start with. what is funny is my brother in law is a CPA and he even said this to me.

Hahaha! True but there was no other way of getting that info to him so it was the lesser of the two evils! LOL!

An accountant is OK and maybe it's because I deal with companies that gross millions per year but I still think that a CPA can give you a little more in depth advice as far as strategizing how to set up your business so that Uncle Sam doesn't penalize you at the end of the year along with questions that you may have throughout the fiscal year. Can an accountant do it? Sure, but I liken it to hiring someone to be your CFO have a B.A. in business administration and someone that has an MBA. I want the MBA. Can they do the same job? Sure but when push comes to shove and the business is blowing up I want to make sure I have special forces working for me and not just regular soldiers.
I always like to project and have staff in place for what's coming and not what just what needs to be done today. In other words, why set up a team of people that you will have to replace in the next year or so? Nothing worse than having locate someone to fill a key position and have to bring that person up to speed. The time it takes is revenue lost. A little more spent up front will gain you much more in the long term. A classic case of short money versus long money!

John

 

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badalou

Quote: Originally Posted by novanutcase Hahaha! True but there was no other way of getting that info to him so it was the lesser of the two evils! LOL! An accountant is OK and maybe it's because I deal with companies that gross millions per year but I still think that a CPA can give you a little more in depth advice as far as strategizing how to set up your business so that Uncle Sam doesn't penalize you at the end of the year along with questions that you may have throughout the fiscal year. Can an accountant do it? Sure, but I liken it to hiring someone to be your CFO have a B.A. in business administration and someone that has an MBA. I want the MBA. Can they do the same job? Sure but when push comes to shove and the business is blowing up I want to make sure I have special forces working for me and not just regular soldiers. I always like to project and have staff in place for what's coming and not what just what needs to be done today. In other words, why set up a team of people that you will have to replace in the next year or so? Nothing worse than having locate someone to fill a key position and have to bring that person up to speed. The time it takes is revenue lost. A little more spent up front will gain you much more in the long term. A classic case of short money versus long money! John

See here is the problem. Most and i would say 96% of the people here are starting a new business. So they have no business. They do not have a building as they are working out of their home and they have no employees. The have just enough equipment to get the job done, They are basacaly a sole propriorot business. Most will do well under 25,000 if they are lucky. They have an Idea of a business.So to jump in and spend the money for a CPA or to get a fed ID because they are afread to show thier SS number is silly. I have have been in business in one way or another for 40 years and I have yet to need a cpa or get a fed ID as I do not have employees which if you had then you would need a fed ID. I have a business license
A sellers permit and that is it. For the last 5 years I have used turbo tax to do my taxes. CPA are mostly used by multimillion dollar companies. I think a lot of people are nervious and think they need all this stuff which they don't. A good accountant is your best route. I don't think you need to worry about the IRS penalizing you. Just keep records of your deductions on a spread sheet.

__________________
There is a center to everything.. I found mine at..
www.heatpressessentials.com TEE SQUARE IT, LOGO IT! TEE PAD IT! www.tbiz101.com (New)Heat Transfer Education

 

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Girlzndollz

Good points, fellas. Me? I am a Nervous Nellie when it comes to fraud these days, I've been frauded twice, one by cc and once by fraudulent checks draining my checking... so I did go for, and am relieved to have, the EIN to shield the SS#. I guess because I've been there, so I feel better protecting that number.

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novanutcase

Quote: Originally Posted by badalou See here is the problem. Most and i would say 96% of the people here are starting a new business. So they have no business. They do not have a building as they are working out of their home and they have no employees. The have just enough equipment to get the job done, They are basacaly a sole propriorot business. Most will do well under 25,000 if they are lucky. They have an Idea of a business.So to jump in and spend the money for a CPA or to get a fed ID because they are afread to show thier SS number is silly. I have have been in business in one way or another for 40 years and I have yet to need a cpa or get a fed ID as I do not have employees which if you had then you would need a fed ID. I have a business license A sellers permit and that is it. For the last 5 years I have used turbo tax to do my taxes. CPA are mostly used by multimillion dollar companies. I think a lot of people are nervious and think they need all this stuff which they don't. A good accountant is your best route. I don't think you need to worry about the IRS penalizing you. Just keep records of your deductions on a spread sheet.

Point taken although I still think if you're going to do anything do it all the way. If you're going to sell t-shirts then......sell t-shirts. Don't do it kind of/sort of. that's just slow death. I understand that many have day jobs that they need to attend to and maybe you're right. It would be best to set it up the way you say and then amend it later. Me, I like to set it up with the idea that it will be a big success and I will need these people when that time comes. To me it's just good energy on the business.

John

 

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