Author Topic: Small business tax information?  (Read 498 times)

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Small business tax information?
« on: March 07, 2012, 10:30:21 AM »
My friend and I have been selling on eBay for awhile now and is making pretty good money. We are ready to expand and make it a real legal business with the two of us being business partners. We are not sure where to begin as far as organization. Which is best for us or even what the differences are...partnership, LLC, corporate, etc. We plan to either rent an office space or rent her mom's garage to work from and keep inventory.

     Also, I'm not sure how the tax thing is going to work at the end of the year. Besides this business, I still have a regular job. Will I have to file my personal tax return from my job and the business tax separate? Do I have to add my share of the business income to my regular jobs income and file it as

One? Etc... I'm so lost. Any help would be greatly appreciated. By the way I live in Florida.

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Re: Small business tax information?
« Reply #1 on: March 07, 2012, 03:30:20 PM »
You are a partnership and should have reported the 2011 income on a 1065.  The 1065 return has 2 schedule k-1 forms that give you your share of the income to put on your tax return.

You do not need an LLC or corporation.  You do need good records.

How did you report the 2011 income?
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Norman

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Re: Small business tax information?
« Reply #2 on: March 07, 2012, 04:01:23 PM »
You and your friend should sit down with a financial advisor and discuss your business and personal financial situations. Selecting a business entity involves much more than the tax consequences. There are additional concerns like liability protection, cash flow expectations, adding employees/shareholders/partners, business life, etc.Investing one or two hundred dollars for good advice can help you avoid costly mistakes later.
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tro

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Re: Small business tax information?
« Reply #3 on: March 07, 2012, 04:30:27 PM »
I hope all this time you have been correctly reporting this ebay business on sch C's etc
I personally am not in favor of forming an LLC in situations like yours, those become more complicated than you need to do at this time
if you form a partnership, this will require an EIN, you will file a 1065 and K(1)'s to each partner of their share of the profits, which in turn will be reported on your personal tax return on Sch C and SE
since you have a regular job, work out some kind of arrangement that your friend operate as a sole proprietor, working out some method of your share of the profits that can be claimed as and expense for them
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