The Small Business Tax Help Blog

Posts Tagged ‘web2.0’

Question: Adding a 50/50 partner to Start up Business?

Hello all,

About 5 months ago I set up an LLC in the state of Idaho. A friend (in texas) decided to partner with the new business. We haven’t officially started yet. It’s a dotcom business.

My questions to you :

Where do I start as far as paperwork?

Do I go change the LLC first?

Do I need to put him on the EIN paperwork?

Where would I begin as far as legal contracts? What kind would I need?

Do we need to set up a dba, another business address in Texas, or something similar if he is doing the work in Texas and I’m here in Idaho? Or is just having the corporate office in Idaho ok since its an online business? Would it better better to set up an office address there?

I would greatly appreciate any advice/tips. Thank you kindly.

Best,
Jason

Answer: First thing you need to do is reach an operating agreement. Operating agreements govern issues of control, key decision-making, and buyouts of shares if one of you decides/needs to leave the company.

Once you both sign the agreement (don’t leave it unsigned), you can change the LLC.

I’m not an attorney but I doubt you need to set up separate corporate entities, unless there is a tax reason to do so. For example, Texas has no income tax.

I strongly recommend you do not do this alone. Hire an attorney who works for you. Your partner should do the same. A couple thousand bucks’ investment now can save you from much more losses down the road.

Unsolicited advice – 50/50 relationships are very tricky. When you disagree, you can paralyze and kill the company. In some states, when you have a true impasse, a judge can force the dissolution of the company.

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Question: I need help choosing the best accounting software.?

Hello! I am a small business owner, married, and have a full-time job out of the home. I want to get accounting and invoicing software for my businesses. I have a freelance writing and editing business and a jewelry and accessories business. I would like the software to allow me to create customized invoices and quotes, track payments, show where money is going and coming from, organize charges for tax purposes, allow me to print and email the invoices and quotes, organize my clients and customers’ information, easy to use, and not too expensive. I would prefer one software package rather than two to do both the accounting and invoicing. It can be any brand as long as I can download it. I would like only software(s) with a free trial to see if it is for me.

Any input, suggestions, etc. would be greatly appreciated.

THANKS!

Answer: It’s not exactly what you are asking for, but Quickbooks is the way to go. Yes, it’s a little expensive and takes some time to learn. But it’s full-featured. It can handle anything you are doing now or wish to do in the future. It has all the features you want.

You basically can’t get full-featured software that is ‘easy to use’ and inexpensive.
I know – I’ve tried many different accounting programs. Eventually, you will want to enter a transaction and the cheap software won’t have the required feature. As an aside, tax laws and tax tables change every year, so whatever you buy if you are planning to use it for tax purposes will need to be upgraded to the new tables each year. And yes, you have to pay for such updates.

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Question: In Nevada, is seller’s permit number the same as tax ID number?

I’m getting confused by all the different numbers and the auto-response machines at the department of taxation.

So my question is:

1. Is a seller’s permit number the same as the tax ID number in NV?
Then there are a bunch of other numbers: NV business ID, Entity number, etc.

2. If I did the initial filing (which was somehow put together with the business license appliation),
am I allowed to write the Resale certificate (http://www.tax.state.nv.us/documents/Resale_Cert_22509.pdf) that was here?: http://www.tax.state.nv.us/forms.htm

So for the “seller’s permit number” would I write my tax ID?

Answer: Reseller’s number and sales tax id, likely yes – not the other numbers you mention.

New Business Tips : How to Open a Business

Question: Can i give my subcontractor a company credit card for any of my business expenses?

Can i give my subcontractor a credit card to pay for my business expenses? Or would doing this clasifiy him as an employee?

Answer: He could still be a subcontractor. The IRS has rules to disallow some people if you treat them like an employee.
As long as you don’t do things like schedule his time or having him work exclusively for you, allowing him a company credit card shouldn’t matter.

Measuring Business Income 2-Adjusting JE Assets & Expenses