New business: Taxes and such

Kamar

Hello H/A.

I'm currently in the middle of starting a internet marketing business, and need some advice regarding taxes. I'm located in TN.

First thing I need to explain is the nature of my business.

I create and maintain websites for local businesses, designed using SEO techniques to show up within the first few entries on relevant search engine searches. I also create and maintain Google Ad accounts for my clients. I am currently the only person involved in the business, and will likely continue to be the only one involved for the next year or so.

As far as state laws and such go, I'm pretty sure that since I maintain ownership of the website, as opposed to making it and giving it to the client, that I am immune to TN sales tax. Basically they are paying for their contact information to be in the correct spots on my websites.

That's pretty much the only thing I've been able to work out on my own regarding taxes, though. Anyone able to help me out here? If I'm just careful to bank as much as possible, then get myself in touch with a CPA in the near future, will there be any problems as long as I'm keeping adequate records? Is there any software I should use to make things easier on myself?

Thanks in advance.

Edit: Also, I work from home.
Another Edit: I'm mostly concerned that there may be all sorts of special taxes for a business of this type or something like that that I'm not aware of.

EggyToast

You're doing contract work for companies and providing a service, not selling them a product, so you're right that you shouldn't have to pay sales tax. Sales tax is for selling a product.

You do of course have to pay your own income taxes. Are you filed as a business at all, or are you working completely freelance? You should get in the habit of paying your taxes quarterly, to avoid surprises and potential penalties. And, yes, you probably do want to get in touch with a local CPA. They typically aren't that expensive for stuff like this, since you're only 1 person and your income should be relatively straightforward.

Thanatos

You need to be talking to a CPA now. Unless we happen to have a Tennessee CPA posting on these forums (which I doubt), none of us are going to be able to tell you what you should be doing to minimize your tax liability; putting off seeing one until later could cost you quite a bit of money.

-Phil-

You also might want to think about making it an LLC or similar entity if you have not done so yet. Jus to protect yourself.

Thanatos

-Phil- wrote: »

You also might want to think about making it an LLC or similar entity if you have not done so yet. Jus to protect yourself.

Generally, when you're a small-time contractor like this, incorporation really isn't worth the expense and trouble.

Tron

See a CPA and a lawyer.

Some form of business entity is nice for tax purposes and asset protection.

Dr. Frenchenstein

incorporation doesn't really make sense unless you want to keep everything separate. You lose money with the double taxation though. Corp gets revenue taxed, you get income taxed (i'm pretty sure that's how it works). but yeah, talk to a CPA at the very least.

Ganluan

Thanatos wrote: »

-Phil- wrote: »

You also might want to think about making it an LLC or similar entity if you have not done so yet. Jus to protect yourself.

Generally, when you're a small-time contractor like this, incorporation really isn't worth the expense and trouble.

It depends on the state, but in many it's very simple and cheap. You can do it in AZ for something like 50 bucks and the forms are very simple. Plus, if it's just you and you go for a regular LLC, you get basic pass-through tax status so it doesn't complicate your taxes like a corporation filing would.