Ugh! I'm so overwhelmed :(

[Sandra Dee]

I don't even know where to begin!!

I registered my domain name and am just using a template through wahmshoppes - since it's ONE product and a small start-up. (We can always upgrade later)

BUT - I don't know where to begin elsewhere. I checked out that site and called DH and basically, it would be like $500 to set up.

Otherwise, I'd have to register as a PC and then pay taxes twice - once when I sell items and a second time when I spend money out of my business account. DH said it will be a huge mess when we file our taxes at the end of the year

So - now what?

[Knittin' in the Shade]

First off, you don't have to register as a PC, that costs a TON of money!! But you should get a biz licence from your state before selling anything at all. I did mine online here in PA, it was quick adn didn't cost anything. Also, I'd suggest getting biz insurance (most WAHMs have it through RLI http://www.rli.com) I wouldn't even consider selling before having insurance.

Not sure what you're referring to for "that site" and costing $500 to set up, so can you clarify?

As for taxes, if you are doing internet commerce, the only time you have to pay sales taxes on what you sell is if you sell to someone in your state. OTherwise, internet sales are considered interstate commerce and aren't taxable. you will, however, have to pay income tax on them at the end of the year, but you'll also be able to claim business deductions (like inventory, ad expenses, etc). As for paying taxes when you spend money out of your biz account, I'm a bit confused there as well. Naturally, when you spend money you'll pay sales taxes, but that's unavoidable. As far as I know, though, there aren't any special taxes for spending business profit, perhaps I'm just unaware? If you set up as a sole proprieter (the easiest way for a small biz) then all profits are yours to spend, basically. It's not like capital gains, or having to distribute salary with a corporation.

[Sandra Dee]

nak

thanks - I'll ask DH and see what he says about it

[Sandra Dee]

Okay - DH came home for lunch.

Forming an LLC is the best option because it protects you as an individual from being personally sued. Granted, it's not likely - but they can't touch the house/personal property that way. Also, when taxes come into play with an LLC, a single member LLC is taxed exactly the same way as a sole proprietorship. (so my income would be counted with the family income).

If you don't anticipate much liability from your business (eg. small dollar amounts or products not likely to cause injury - like mine and yours Theresa) a sole proprietorship with adequate insurance coverage may be a cheaper but still acceptable alternative to a full LLC.

Choosing between an LLC and a SP is a cost benefit analysis. DH always suggests at least setting up a single member LLC because it provides you with limited liability with the same taxation as a SP.

The tax issue I was speaking of was in regard to forming a corporation. (where you get taxed twice)

So, basically, after this massive "discussion" and lots of frustration - DH agrees with me that an SP is just fine for what I need.

[lkblair]

Originally posted by Knittin' in the Shade
Also, I'd suggest getting biz insurance (most WAHMs have it through RLI http://www.rli.com) I wouldn't even consider selling before having insurance.

This link sent me to a laser safety site. Does anyone have a correct link? Thanks.

[LaLa]

:LOL

[Knittin' in the Shade]

Glad Dh came around, LOL! I think investing the $$ in a LLC when you're just starting out and not even sure what will happen is probably not the wisest investment of capital And I think as long as your selling low-risk items (not slings, LOL!) then you're safe with SP and insurance. Make sure that the insurance does have product liability, often times th home biz insurance only covers biz equipment and people being injured in your home.

Sorry about the bum link-the correct one is http://www.rlicorp.com