I started a business and now want to know the tax consequences?

Question

Do I file a separate tax return for the business? It’s a sole proprietorship.
Can I deduct startup costs?
Any more tax advice would be helpful.

Answer 1

You do need to file a separate schedule (Schedule C) that needs to be attached to your personal Form 1040. That said, the advice about finding a CPA is a good idea. I am a cpa, and I wish clients would come to me before they start the business instead of after they've been open for a few months. There's a huge administrative burden as a company owner. For instance, have you filed any paperwork with the Secretary of State for a business name? Also, are you planning on paying employees? If yes, you need to get a federal tax id number. Are you going to be selling to the public? If so, you need a sales and use tax number. Does your state allow you to be set up as an LLC? It might be worth considering if your business is at a risk of being sued. See what I mean? This is complicated stuff, and the best advice you're going to get is from a cpa. Try to get a referral from a friend, your dentist, anyone who owns a business. Usually, most cpas won't charge you for the initial consultation. After that, you'll be paying a good buck, but an accountant can be your business's best friend.

Good luck with your new venture!

Answer 2

If you were incorporated, you'd file a separate return for the business, since incorporation basically establishes the business as an entity separate from yourself.

Since you're sole proprietor, you'd file Schedule C as part of your tax return, with the business information.

You'd be wise to talk to a tax professional (a CPA, not H&R Block) to find out just what you need to do, and what you can deduct. Their advice will probably be well worth the cost.

Good luck.

Answer 3

The tax consequences are as follows: IRS Regulation 123.456.789. q: how muvch money do you have? Send it all to us.

Seriously; the better questions is: Is a sole proprietorship right for you. As a sole proprietor you pay as an individual. Business expenses are deductible. subject ot certain limitations.

You should check with either a lawyer or CPA, but consider operating as a LLC or SUBChapter S Corp. Each has its own pros and cons.

Answer 4

A sole proprietorship's income and expenses are presented on the IRS Form 1040, Schedule C. Start-up costs are not deductible. If I were you I would invest in some quality time with a local CPA, who can help you minimize your taxes.

Answer 5

Sole proprietorships are filed on your personal tax return. You can deduct certain start-up costs, but must depreciate capital items. Best advice I can give you is to find a good CPA - mine saved me a bundle.

Answer 6

Like everyone else I say get a good CPA mines 750 a year includes weekly accounting monthly profit and loss statements and tax returns at year end and quarterlys. You are also required to pay 15% self employement tax and stuff you would never think of.

Answer 7

Suggest you hire an accountant and get expert advice, whose expense you can deduct from taxable income.

Answer 8

Seek a tax advisor.

Answer 9

www.irs.gov