What taxes and regulations apply to a 15 year old's business?

Question

I would like to start a business fixing computers, comp tutoring, etc. My question is what kind of taxes apply to me and do I need to register business name and everything?

A few more questions. Could I have an example for using my own name. How do I find out about what I have to charge tax on and get info about local tax filing as well as federal. Also, I need more info about corporation and contract binding?

Answer 1

If you sell within the confines of your own state lines, you collect sales tax on the PARTS, not labor of the refurbished product.

As for other taxes, there is nothing special about your age. You pay self-employment tax like any other sole proprietorship.

You need to consult a CPA... not depend on schmucks like us on the internet. They wont steer you wrong, and they will know local regulations and taxes we may not know....

Answer 2

The same regulations apply as would if you were 30. Those can vary depending on where you are located.

If you make over $399 in a year from your business, you'll have to file a federal tax return and will owe federal self-employment (social securityand medicare) taxes - if you make over $5350 you'd likely owe federal income taxes also. Depending on where you live, you might also be required to file a state and/or local return and pay taxes to them.

You very possibly don't have to register a business name, can just use your own name and use your social security number as your taxpayer ID. If you use a name for your business other than your own legal name though, you probably do have to register it.

If anything you do in your business is subject to sales tax in your state, then you'd have to register with the state to collect and remit the sales tax.

If you have any employees, the whole thing gets much more complicated - I assume you're just planning to do this on your own at least for awhile.

Answer 3

You pay the same taxes as an adult. In fact, your income taxes may end up being paid on your parents' 1040.

You follow the same regulations as an adult.

The only major difference is that ownership of the business has to be through a trustee, since you're a minor, to comply with the Uniform Gifts To Minors act.

You might consider structuring this business as a corporation, because a corporation can bind itself to a contract, and a minor can only do that if it's for the necessities of life.