LumberJocks

paperwork required for business

  • Advertise with us

« back to Sweating for Bucks Through Woodworking forum

Forum topic by mziem posted 09-14-2009 08:53 PM 935 views 0 times favorited 9 replies Add to Favorites Watch
View mziem's profile

mziem

24 posts in 2068 days


09-14-2009 08:53 PM

Topic tags/keywords: business question

At the risk of writing a totally redundant post, here it goes. I want to start a part-time woodworking business. All of my searching on the subject showed me what to build, how to get customers, how to advertise, etc…not what I’m looking for.

I need to know what forms to fill out so I can write off the shop, depreciate the machines, file taxes etc…the boring paperwork stuff. I figured the best people to ask would be the most awesome woodworkers in the world…YOU.

Thanks in advance.
Mike

-- We are what we repeatedly do. Excellance, therefore, is not an act but a habit. ~Aristotle~


9 replies so far

View Craftsman on the lake's profile

Craftsman on the lake

2420 posts in 2189 days


#1 posted 09-14-2009 08:58 PM

you may be right about these guys being the best people to ask but when I do stuff like this, i.e. I rent a house, run a small business on the side, etc. I contact the guy who’s done my taxes for several years. It’s good to have a tax guy, maybe from a small agency who’s always there for questions. He sees it all so he knows.
I do know that I you save everything. So much is deductible. Catagorize it and pass it on during tax time.

-- The smell of wood, coffee in the cup, the wife let's me do my thing, the lake is peaceful.

View Tim Marko's profile

Tim Marko

41 posts in 2539 days


#2 posted 09-14-2009 10:33 PM

Second the accountant vote!

When I started my business, I went to an accountant to “set up” my books and tell me what I needed to save and where to put it. Mine was set up for use in quickbooks, but there are others out there.

After the first year, I took everything back to him and had him show me how he was doing my tax reporting. Since then I have used turbo-tax for my taxes, but still have him check it over before filing.

It’s worked well so far.

The cost is small when compared to the potential problems caused by an “innocent mistake”. (The IRS doesn’t see it that way!)

-- Tim, trying to come up with something cool to say here!

View reggiek's profile

reggiek

2240 posts in 2021 days


#3 posted 09-15-2009 12:37 AM

I second the second above.

There is also a publication by the IRS for small businesses or you can look at their web page www.irs.gov.

The first issue you may have is what form of business (Corporation, LLC, Partnership or Sole Proprietor). If you have significant assets to protect (house, land, retirement…etc) you may want to inquire about incorporating (you can do a search on business types to see what would work for you).

Depending on what name you want to use, you may need to file a fictitious name with the county (check with your local chamber of commerce…they can help you out with all that – or your county administrative office). There may also be a local business license required (there is none for the state – unless you will be doing contracting (if you effect the physical home or property (i.e. remodeling…putting in windows…doors…) you will need to be licensed as a contractor unless you only want to do jobs under $500.00.

The only other items are insurance (get a general liability policy at minimum). Sales tax number (from your state sales tax office)...if you are going to hire employees…you need to get an employer ID from the IRS and from your State Board of Employment.

I think Todd Clippinger did a blog answer about using the SBA and other issues on another similar question…he would be a great resource…try sending him a PM.

-- Woodworking.....My small slice of heaven!

View a1Jim's profile

a1Jim

112933 posts in 2328 days


#4 posted 09-15-2009 12:40 AM

ahh heck That seems the way to go .Talk to the tax folks.

-- http://artisticwoodstudio.com Custom furniture

View mziem's profile

mziem

24 posts in 2068 days


#5 posted 09-15-2009 01:04 AM

Thanks guys…YOU ARE AWESOME. This is exactly the info I was looking for. I knew I could count on y’all

-- We are what we repeatedly do. Excellance, therefore, is not an act but a habit. ~Aristotle~

View jeffthewoodwacker's profile

jeffthewoodwacker

603 posts in 2555 days


#6 posted 09-15-2009 02:56 AM

Go see your insurance man first. You will need a general liability insurance policy (reggiek recommended this), a bond insurance policy and a personal liability policy. I would recommend at least a $3,000,000 policy, but talk to your insurance man. Check out all the tax permits you need. Where I am you have to have a city, county and state tax permit. Invest in a pay pal account and get set up to take credit cards. Once I started taking credit cards my business increased 50% – some folks just don’t like to give cash or checks.

-- Those that say it can't be done should not interrupt those who are doing it.

View TopamaxSurvivor's profile

TopamaxSurvivor

15088 posts in 2427 days


#7 posted 09-15-2009 07:45 AM

It’s really not hard to keep track of all your expenses and create a profit and loss statement. If you are a LLc it goes on your personal 1040. If you are incorporated, you need to file a seperate 1040 for the corp. You can apply for Sub S status with the IRS, then your corp will never pay any taxes, they pass through to your personal 1040, but you still have to file both. LLC or sole properitorship, yoi only have to file one 1040.

If yoiu have employees, there are a multitude of rules, regs and deadlines ready to bite you in the rearend!! it’s not hard, yoiu just need to be aware of them. You normally get frogiven by the fedes for your first violation, but the second will cost $$$ :-((

Good luck.

-- "some old things are lovely, warm still with life ... of the forgotten men who made them." - D.H. Lawrence

View rustfever's profile

rustfever

639 posts in 2061 days


#8 posted 09-17-2009 06:20 PM

You should obtain the services of an advocate. We did so some 35 years ago and have never regreted the move. We use the California Association of Employers. They keep us up-to-date with the multitude of laws that may effect us. They helped us in our health insurance, minority policy, safety program, workers comp insurance, Illness & Injury Prevention Program, etc. [In our industry, I need each of these item, even without employeeing others]

They have also been an advisor for the several employee/employer legal action. They have always be quick to respond and very much ‘Dead On’ with their knowledge and advice.

-- Rustfever, Central California

View jockmike2's profile

jockmike2

10635 posts in 2997 days


#9 posted 09-17-2009 08:48 PM

HGTV PRO has a lot of the forms you might need to run a business, like keeping track of your hours and your emloyees hours, keeping track of every thing. Worth checking out. Even has calculators for figuring cement amounts and how much roofing you need or tile for a job. Just a lot of good info.

-- (You just have to please the man in the Mirror) Mike from Michigan -

Have your say...

You must be signed in to reply.

DISCLAIMER: Any posts on LJ are posted by individuals acting in their own right and do not necessarily reflect the views of LJ. LJ will not be held liable for the actions of any user.

Latest Projects | Latest Blog Entries | Latest Forum Topics

HomeRefurbers.com

Latest Projects | Latest Blog Entries | Latest Forum Topics

GardenTenders.com :: gardening showcase