Questions on Legality, Taxation, Incorportation, etc..

[Joseph Bona]

Hey,

I was wondering if anyone could give me advice or their experience with making money online and the legalities. I currently have 5 domains registered privately in my own name and am beginning to see profit (very small profit) from ad revenue. I am not sure where to begin with getting a tax id, opening a company bank account, legal issues, etc...

If my sites do begin to bring in a decent amount of money I don't want the IRS knocking at my door.

I suppose this question applies to anyone starting a company LLC or corp so any advice would be great..I am sure many of us have these same questions.

It's not the most glamorous thread but it's vital info..Thanks in advance

Joe

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[MamaD]

You didn't ask a question.

 

[Joseph Bona]

I was wondering if anyone could give me advice or their experience with making money online and the legalities. I currently have 5 domains registered privately in my own name and am beginning to see profit (very small profit) from ad revenue. I am not sure where to begin with getting a tax id, opening a company bank account, legal issues, etc...

The question is, Can you give advice on this?

 

[MamaD]

I established a LLC that I use as an umbrella company (of sorts) for my online projects. To set up a business bank acct, I had to have my tax id from the irs Apply for an Employer Identification Number (EIN) Online In my state, I didn't need a business license.

You'll have to check your state requirements for operating an online business. As far as the irs is concerned, report everything. I know affiliate companies and Paypal now report income to the irs.

You should find a CPA that's knowledgeable about online businesses.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Joseph Bona]

Thanks for the reply...I have been looking at Legal Zoom.
Has anyone had any experience with them? They set up your tax ID with the Irs with their gold package..Is it a complicated process? or should I just do it on my own

 

[MamaD]

Thanks for the reply...I have been looking at Legal Zoom.
Has anyone had any experience with them? They set up your tax ID with the Irs with their gold package..Is it a complicated process? or should I just do it on my own

The process isn't that difficult. You already have to pay your state for the paperwork to set-up your biz. The tax id is free from the IRS and you can do it online and get your id the same day. Just find out what you need to do to establish a business in your state and the rest is just filling out paperwork.

 

[Joseph Bona]

Thanks a lot...I'm going to get started on that

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[FastNAwesome]

Hey,

I noticed too threads like this ain't among most popular, but even that has a good side, as for such serious stuff you cannot rely on forum advice anyway, especially as not everyone is from your state.

Find a good accountant as number one, and - if you can afford one, it's good having a lawyer, but legalzoom probably can do the work. Just read their disclaimer and keep in mind they're not attorneys, they just assist you in filling and submitting documents, which you'd be able to do yourself anyway. But it is certainly better having someone with experience taking care of that for a small fee.

 

[karakoram]

I wouldn't worry about it until you start earning more money from your sites. There is a lot of paperwork and hassle that goes with registering an LLC or a Corp (I have done both at various times). If your state charges sales tax, you have to file a monthly revenue report showing your sales and taxes you collected, etc.

If you want to stay 100% legal and kosher with IRS, just report your income from your sites, and be sure to deduct the expenses of running them.

At some point, it makes sense to found the LLC or S-Corp. My personal feeling is that a person should be earning $1000/mo net of expenses to justify the hassles. THis is not a set in stone figure. Just a rule of thumb.

 

[charleswalker36]

These would be good questions for a business attorney. Any time you start your own business, online or not, it's a good idea to consult with a reputable business attorney to make sure all of your bases are covered.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[johnp]

I

f my sites do begin to bring in a decent amount of money I don't want the IRS knocking at my door.

They don't always come knocking on your door. When I was in college I made about 30K over the course of 4 months selling electronic books online. I did not pay a single penny to the government (EXTREMELY STUPID :smx4, but they did not come for me (not yet at least).

...but I took the legal approach for my new company. The advice on this thread is good and it is not that hard to do things the legal way. You can also do everything through legal zoom, which is a very cheap process.