I am confused as to whether I just register as a business with my state or if I set up an LLC. I want to be all on the up and up in regards to taxes. I think if I set up an LLC I have to have a business bank account and some other things from what I was reading. I had started looking into this about a month or so ago, but more pressing things cam up like working thru healthcare.gov and gathering info for last years taxes. This is one of the last big to-do's on my list, so hopefully I can get it taken care of soon.
@flyingmonkey
You don't need to set-up a LLC to register as a business in your state.
You can register as your name and Doing Business As Flying Monkey ( DBA)
Your Name
DBA/ Flying Monkey
Registering as a business in a state is a necessity for collecting and remitting state sales taxes on purchases within your state ( including a person buying on line, but whose physical address is in your state). You would receive from your state a Tax Resale Number.
But, being an LLC or any type of corporation is not necessary for registering and receiving your state tax resale number for the type of retail selling you do.
You can set-up your bank account the same..Your Name
DBA Flying Monkey.
You would remit to your state sales tax collected on sales within your state....
and file your Federal Income Tax, as you do now, with appropriate business deduction schedules.
You would file your State Income Tax , the same way.
Setting up as a LLC, primarily, is to protect you, as an individual, against someone suing you .The business would be sued...Flying Monkey LLC)... and not you, as an individual.. That's why it's called Limited Liability.
Unless you were selling products which may have the potential of a lawsuit...pajamas without flame retardant which
caught on fire...herbal preparations or cosmetics which buyer claimed caused irritation...tea, coffee or a foodstuff which buyer
claimed caused illness...etc.etc...as examples, you may not have a need to register as a LLC.
But, you would want to check with your state if there are any possible tax benefits for a LLC, versus a DBA, in your particular
state.
In fact, sometimes there are disadvantages to be registered as a business ( when very small) because taxes may be higher on a business, ( rather than a self-employed person). Each state is different.
You should be able to get a quick answer in a call to the department in your state. which handles registering for a business.
Also, I like the short-cut of "googling". It's amazing the info you can find out, quickly. Just google the question a couple ways, " Such as," Is a DBA or LLC better in ______ state).
Another factor of saving money with a DBA is the cost of your bank account. Business accounts usually require a
larger balance which you can't go below without being charged. Many business accountys charge for checks and a maintenance fee. If you have now a personal account with free checking and no minimum balance, you may be able to just add DBA Flying Monkey to it ( many banks allow you to open a personal account with a DBA.
So, you would have to decide if you really need or want a LLC for the total cost involved...or if a DBA would serve you just as well.
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