tax question

jason rawls

jason rawls

Weekend Warrior
I know it's a little early for tax season but I wanted to make sure I have all my ducks in a row when it comes time. I started my own part time business this year and plan on claiming all of my business expenses. My question is do I need some kind of tax ID or license in order to do this? I have a business license from my county but do I need anything else as far as federal goes?
 
The law varies from state to state and many times is depends on how much money you make. I have a part time business that did not require me to get any special tax number. However, When you file your taxes, there are guidelines that must be followed for how much in expenses can actually be deducted in the current year and many other things. The safest thing to do is to contact your accountant.
 
I beleive if you have a part time business or set up a single member LLC you do not have to have a EIN. All you do is report your income and expenses on Schedule C of your Form 1040. You might want to take a look at the instructions to this at the IRS website. If you are going to incorporate or become a partnership then you will need to fill out an SS-4 to get the ball rolling. I would check with your local tax department regarding sales tax issues. If you have start up expenditures or organization costs you should be able to make an election to amortize those costs. Just a heads up.
 
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