Posts by Henry Edwards33

Sure enough

Daniel Davis43,

Look, if your product or service costs $33, plus a $7.75 sales tax, the customer ends up paying $41. Out of that total, you keep your 100, which means your actual price is just the cost of what you're selling—the remaining $7.75 is just the state's cut that you're holding onto temporarily before passing it along.

Sure, once you hit retail, those prices look steeper to the consumer, but you always have the option to stay under the radar of the IRS and avoid registration until your annual revenue hits $28.

Daniel Davis43,
Look, I’m trying to be helpful here, but I honestly didn't follow what you were asking. 😁

Let's take this step by step so we can clear things up.

First off, you brought in $33333 in revenue. And that was back in 2009, right?

If that's the case, there's no sales tax involved here. Under US tax law, if your revenue stays under $28333 during a calendar year, you don't automatically trigger sales tax registration requirements for the following year.
So, the income you earned doesn't have sales tax baked into it.
Even when you *are* registered for sales tax—like your tax advisor mentioned—you aren't actually paying that tax out of your own pocket. The customer pays it. You just invoice them for the value of your goods or services and add the appropriate percentage on top. That's how it works: the buyer covers the tax, and your only job is to collect it and pass it along to the IRS using the proper filings.

Because of that, you don't subtract sales tax from your gross income when you're filing your income tax return.
On top of the standard deduction, you also have other deductible expenses you can claim on your return—things like paid premiums, medical expenses, real estate investments, and so on.

By the way, income is always calculated before any sales tax is added. 😉

If you’re actually planning on funding both parts of your 401(k), you're looking at roughly $593 🙂
per year.

You don't have to pay for every single business activity individually when you first register. Honestly, the smartest move is to just check off as many categories as possible right from the jump.
Adding more activities to your scope later on will definitely cost you extra.

It’s mentioned somewhere in these threads if you care to dig through them, but I really can't be bothered to go looking 😁
The short answer, though, is that both partners are responsible for paying their own contributions.

mistywolf68, you’ve got to look into the Lacey Act; it lays out all those specific standards and regulations you need to follow if you're working in this industry.

And let’s be real—if you’re actually turning out wood products, you're going to have sales, which means you'll need to meet those same compliance standards just to keep the trade moving.😁

Your best bet is to check in with the local Chamber of Commerce, since they're the ones who really dictate how those requirements are applied.😛

They aren't necessary.

Raymond Peterson81 said:Well, I was just thinking

I run my business out of my parents' place since I haven't bought my own house yet—and right now, I'm actually living about 60 miles away as a renter. I want to officially set things up, but I'm stuck on how to manage everything without constantly driving back and forth between the two places.

The business address is a big deal here. I don't really care where my actual office is located, but the problem is all the mail—like bills and official notices—is going to end up at my parents' house instead of where I actually live. 😉

Maybe I’m misreading things, but if I’m following correctly, you mentioned you already run a business—and now you're looking to start another one? 🤷

If you register your LLC under your parents' address, that’s where all the paperwork and bills start landing. It can get messy fast. But if you set up an actual office elsewhere, you can use that as your mailing address instead. Your delivery address doesn't have to match your official business registration, so you can dodge a lot of that administrative headache right out of the gate.

Keskin, I’m not really following what you’re asking here...

If you’re just getting a business off the ground, why wouldn't you set it up right where you live?

Personally, I could never hand over the keys to someone else to run my company. At the end of the day, the director is the one on the hook for how things perform, and honestly, I'm the type who needs to have my eyes on everything happening under the hood. 😁

Since you need to hand over a Contract Corp to the IRS just so they’ll stop breathing down your dad's neck about taxes, I wouldn't bother messing around with some outdated, backdated paperwork.
Just get a fresh one drawn up ASAP and get it over to the tax office.
Keep in mind that even if he isn't actually charging you rent, the IRS is still going to expect him to pay property income tax. It might actually be a smart move to put a realistic rental figure on paper; that way, you can at least claim those payments as business expenses to offset things.

As for the money you poured into the property—since you weren't technically a tenant, you didn't legally have any right to be making improvements. Now the real headache is proving what you actually spent and how much. 🙄
Honestly, I wouldn't lose any sleep over that part.

Here’s a decent little read on how to start a small business. It’s actually informative and—more importantly—it doesn't pull any punches when it comes to accuracy. 😁

So you’re paying taxes on that too? Interesting. 😂

Ideally, you’d just write the gross amount into the contract so the entire sum counts as the rental expense.

Section 50 of the Internal Revenue Code

(1) Regarding income from property—specifically rental and lease income, excluding short-term rentals of apartments, rooms, or beds to travelers and tourists or campground operations under Section 44 of this Code—tax prepayments are determined by an IRS notice and must be paid by the last day of the current month. When calculating these prepayments, the taxpayer's standard deduction under Section 36 isn't taken into account. The taxpayer settles these income tax prepayments following the procedures outlined in Section 47 at a rate of 15%.

(2) Income tax prepayments from property rights are calculated, withheld, and remitted by the payor as withholding at the same time the income is distributed. This is applied to the total compensation at a rate of 25%, without applying the standard deduction found in Section 36.

(3) Income tax prepayments regarding the sale of real estate and property rights are paid by taxpayers according to an IRS notice. This is a one-time payment per individual transaction, due within 15 days of receiving the IRS notice stating the determined income tax. The prepayment is calculated based on the tax base defined in Section 27, subsection 5, using a rate of 25%.

I’m telling you again, it seems like every single office operates differently. When I was handling all the paperwork for my landlord—everything from the initial filings to the local registry—I made sure to have the Contract right there in my hand. I didn't want to leave any room for error or cause anyone unnecessary headaches. But when I showed up, they told me I didn't even need it because they handle the tax prepayments themselves.

They didn't end up asking me for the Contract, but honestly, I’d tell anyone: just bring the Contract with you and check in with your tax agent. It’s much better to ask twice than to mess up once.🧐

By the way, I actually had an inspector drop by recently. They just wanted to take a quick look at the Contract and verify that the rent payments were being handled correctly, and everything passed without a hitch.😁

The folks over at the IRS told me I didn't even need to bother attaching a copy of my rental Contract Corp, even though I had it right there in my hand. Apparently, they just run their own numbers to figure out the estimated tax, since the landlord is going to report that rental income on their own tax return anyway.

It’s entirely possible that one local office handles things differently than another; I’ve definitely noticed some inconsistent practices here and there. At this point, who knows what kind of mood they'll be in when you walk through the door? 🤣

Of course it’s possible.
The real trick is checking if there are specific requirements for your office space—things like minimum technical specs or whether the unit actually needs to be officially zoned for commercial use.
Once that’s settled, you just sign a Contract Corp and handle the payments via bank transfer. You could technically pay in cash, but honestly, I always prefer having a digital paper trail through the bank. 😁
Here’s a template for a Contract Corp if you want to see how they're usually structured...

If you’re actually pulling in some profit, you’ve got to account for the IRS and Social Security taxes on those earnings.
There’s already a mountain of info out there covering how that works...

It really depends on what time of day the transfer was initiated, but honestly, you should see that money hit your account within two days.

It’s not really about the post office; it’s about the people you actually handed your money to. They're the ones who need to verify if the payment cleared correctly. 😁

It’s easy to say, but much harder to do.
Usually, it isn't a huge deal, unless their system automatically closes out payments before they can match yours to the specific reference number you used. If that happens, the payment won't show up on your account. But honestly, that’s just a minor headache you can sort out with one quick call to customer service. 😉