If I establish my DBA this year do I have to file taxes for the business?

Question

My business plan is to start the business the first of the year(2008), but am unsure if starting the DBA sends the information to the IRS stating that a business was started under my name. And they make come after me to find any tax information for the business while i'm not even using it yet. I want to establish the DBA now so I'm prepared for the first of the year. I have to still get the insurance needed. But is it safe to get the DBA now and Start doing taxes and keeping track of business spending the first of the year? Or should I wait till the first of the year for the DBA too?

Answer 1

Go ahead and file the DBA now. Owning a company name does not mean that you are operating a company. When you establish the company bank account, apply for an employer identification number (form SS4 available at the IRS web-site: www.irs.gov) purchase insurance, etc., then you are conducting business. If you are a sole-proprietorship, i.e., not incorporating, you simply fill out a Schedule C and include that with your personal tax return. Good luck.

Answer 2

This Site Might Help You.

RE:
If I establish my DBA this year do I have to file taxes for the business?
My business plan is to start the business the first of the year(2008), but am unsure if starting the DBA sends the information to the IRS stating that a business was started under my name. And they make come after me to find any tax information for the business while i'm not even using it yet. ...

Answer 3

Having a Doing Business As (DBA) set up tells me that there is a corporation or an LLC already in existence or. If company is already set up then there would not be any additional tax implications.

If you are a sole proprietor and if you are planning on filling taxes on your business when you open, then I would reserve the DBA so no one else can use it, then I would finalize it after the first of the year.

Mainly it depends on your company structure.

Answer 4

You would only need to file any returns if you set up either a corporation (S-Corp or C-Corp) or an LLC. If you set up an LLC you won't have any Federal filing requirement unless you opt to have it taxed as a corporation at the Federal level.

However at the state level, most states treat an LLC as a corporation and require annual corporate returns regardless of whether any business is transacted or not. And many states require the payment of minimum corporate excise taxes regardless of profit or loss. One of the worst is CA which requires a minimum excise tax of $800.00.

There may also be other state filing requirements in addition to the corporate tax returns including filing of copies of the minutes of the annual shareholders' meeting, etc.

If you are going to operate as a Sole Proprietor there will be no need to file any extra returns and you'll only need to file Schedule C and probably Schedule SE with your personal return if there is any business activity to report in any given year.

The DBA filing only links the name of the business to you for identification purposes. That way the public can locate the owners, principal shareholders, or partners of the business if they have any claims against the business. In and of itself it does not trigger any filing requirment.

Answer 5

If you made any money this year, from your business, you need to apply it to your taxes -- doesn't matter if you have a licensed business or not. It would be income.

Call 800-829-1040 and speak to the IRS. You can also download some very good information on the website regarding business.

I kinda remember some regulations regarding business start ups. Something like "you can do business for a while, maybe 12 months?? and then put all the receipts in all at once next year.

Don't call me on this. Check with them for the exact regulation