Subject: questions and concerns
From: Corinthians Hughes
Date: Tue, 03 Aug 2004
I opened a new business back in December, 2003. I am doing laundry and dry cleaning out of my home. I have a contract with a cleaner for use of machinery until I build my own. My customers drop-off and pick up at my home. Since I've been open, I've made about $1,200 from the laundry business.
Do I need to pay any taxes now?
How do I apply for a business license?
Do I wait until I move the business out of my home before applying for a business license and Sales and Use Tax permit?
Date: Wed, 01 Sep 2004
Please consider getting a tax consultant and a business attorney to help you. The problem will be being able to pay the fees.
The income level you are talking about probably doesn't warrant concern about paying estimated taxes. Your tax problem will be the federal self employment tax, for which there is no personal exemption or standard deduction. Go to the IRS web site at www.irs.gov and find Form 1040-ES and the related instructions. Also find Form 1040, Schedule SE for the self-employment tax.
You should not wait until moving to a commercial business location before applying for a business license or sales and use tax permit. Look in the white pages under your city for business license (or call information for your city business office). Also look up your state sales tax agency. In California, look under California, State Board of Equalization.
There may be classes offered for new business owners at a community college near you. Also look for classes and seminars in the calendar of the business section of your local newspaper.
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