Starting a small business

Look, I’ve got the credentials—the degree, the actual expertise, all that jazz—so teaching foreign languages is definitely within my wheelhouse. But I honestly don't get why people assume it has to be with kids? It's not like I'm forced to follow some rigid, soul-crushing curriculum dictated by the Department of Education—I can totally design my own syllabus and use whatever methods actually work for me.
And what if we're talking about private tutoring? You can't exactly pre-package a standardized program for something like that.

So, I was talking to the folks over at the Department of Commerce, and they’re claiming there's absolutely no connection there—apparently, if I set up a tutoring business, it isn't strictly limited to adults. Honestly, you just can't win... one person tells you one thing, then someone else turns around and says the exact opposite. It's enough to make your head spin.

Hey guys, I could use some help here,
A buddy of mine just started his own small business—he's running a shuttle/passenger bus service now—and he’s feeling a bit lost. He needs to know where he actually goes to pay his monthly Social Security and Medicare taxes, and honestly, what the real cost is... because every website he finds gives him a different number.

Also, does anyone know where he should take those business expense receipts (the ones issued to the company name) so they can be properly filed as tax deductions?

They’ll receive an official notice from the IRS detailing the contribution amounts and the specific account numbers. You can also find those figures right on the Deloitte website. Typically, the bookkeeper handles the actual posting of these amounts and prepares the reports needed for filing with the tax authorities.

Charles Martin17 said:Hey guys, I could use some help here,
A buddy of mine just started his own small business—he's running a shuttle/passenger bus service now—and he’s feeling a bit lost. He needs to know where he actually goes to pay his monthly Social Security and Medicare taxes, and honestly, what the real cost is... because every website he finds gives him a different number.

Also, does anyone know where he should take those business expense receipts (the ones issued to the company name) so they can be properly filed as tax deductions?

Paying contributions as a sole proprietor:
$258 - Social Security Tier 1
US Treasury US1210010051863000160
model US68
reference number 8214-SSN

$258 - Health Insurance
Centers for Disease and Prevention HR6510010051550100001
model US68 reference number 8478-SSN

$86 - Social Security Tier 2
regos US0000000000000000000
model US68 reference number 2046-SSN

$29 - Employment Tax
US Treasury US1210010051863000160
model US68
reference number 8770-SSN

$8.50 - Workers' Comp
Centers for Disease and Prevention HR6510010051550100001
mdel US68 reference number 8591-SSN

If the owner doesn't have Tier 2 coverage, they only pay into Tier 1. $344

Contributions are due by the 15th of each month for the previous month, and the amounts are fixed.

My advice would be to hire an accountant, especially since he isn't sure what to do with the receipts. All issued and received business receipts are recorded in the incoming and outgoing ledgers, which serve as the basis for the cash flow statements. You don't actually "take" them anywhere; the accountant simply logs them and then files the annual tax return based on all the paperwork related to the business at the end of the year.

So, basically, he’s trying to fly solo just to save a few bucks instead of hiring an accountant? He really thinks he can handle all that paperwork himself?

My small business has been up and running since late August, but my Social Security and healthcare premiums started hitting back on September 1st. Does that mean I’ll be paying the full nine months' worth of contributions next month—by October 15th?

You can definitely manage without an accountant if you truly know the ropes and understand the process.

Once you register with the IRS, Social Security, and Medicare, those contribution obligations kick in immediately.

It's September 13th now—should he be paying the contributions for September by the 15th, or does that deadline fall on October 15th?
A user named konto12345 mentioned that contributions are paid for the previous month.

Also, regarding those R1 tax forms—is there a specific legal deadline for when they need to be recorded and filed with the IRS?

I see a lot of people here thinking about starting their own small business, so if there’s anyone looking to launch a woodworking shop but you're lacking the workspace, tools, or heavy machinery, please reach out. I've got a fully equipped 1,600 sq. ft. woodshop up in the Midwest ready to go. Also, if there's an aspiring carpenter looking to learn the ropes, feel free to hit me up! Cheers🙂

Kyle Mendoza said:I I see where you're coming from there, looking at it through the lens of licensed versus unlicensed businesses.
You really need specific professional credentials for certain types of trades, and if you don't have them, don't even bother trying to set up an LLC!
That’s just how it works with any regulated profession out there...
But honestly, none of that matters to me—when it comes to kids, you can't just run a small solo operation.🤔

That’s correct. Even for hospitality businesses, the loophole where people used an LLC to avoid registering a certified professional has basically been closed, at least until new regulations are passed. According to the Hospitality Law, both small businesses and large corporations are required to employ qualified staff. 😉 Essentially, restaurants or taverns need to employ a master chef or someone with a degree plus five years of experience dating back to the mid-90s—or just a degree holder for those operating in special coastal zones.

So I’m finally pulling the trigger on starting my own small business, but I’ve already hit a massive wall with all this paperwork... If I'm running a service-based gig where I don't actually need a physical office or storefront, am I still stuck having to get a lease agreement notarized with my landlord (who happens to be my parent), or can I just file a zero-dollar lease since they're letting me use the space for free? I heard through the grapevine that the IRS doesn't even recognize these "free" lease agreements, so I'm sitting here wondering why I'd bother getting anything notarized for an apartment lease if there isn't even any money changing hands, especially since my folks are just being cool and letting me use the place for nothing...

As far as I can tell, there isn't even a need for verification. You just use the standard lease agreement for rent-free space usage.

Robert Johnson11 said:So I’m finally pulling the trigger on starting my own small business, but I’ve already hit a massive wall with all this paperwork... If I'm running a service-based gig where I don't actually need a physical office or storefront, am I still stuck having to get a lease agreement notarized with my landlord (who happens to be my parent), or can I just file a zero-dollar lease since they're letting me use the space for free? I heard through the grapevine that the IRS doesn't even recognize these "free" lease agreements, so I'm sitting here wondering why I'd bother getting anything notarized for an apartment lease if there isn't even any money changing hands, especially since my folks are just being cool and letting me use the place for nothing...

Look, if your business doesn't require a physical commercial space to operate, you don't even need to bother drafting a lease agreement in the first place. And honestly, regarding those "zero-dollar" leases? Speaking from experience, the IRS is definitely not going to buy that story...

In this scenario, that contract doesn't actually function as a billing agreement; it's strictly about defining relationships.

Hey there! If I start my own small business on November 3rd, but my current job doesn't officially end until November 15th, am I looking at paying self-employment taxes for the entire month of November, or just for that second half?

Regarding this point:

Drew Allen77 said:You can definitely manage without an accountant if you truly know the ropes and understand the process.

Once you register with the IRS, Social Security, and Medicare, those contribution obligations kick in immediately.

I guess it feels like it should only apply to the second half of November, but I suppose it would be great if someone could actually confirm that for me.

Right away. From the very first day the business opened its doors.

David Mitchell4 said:Right away. From the very first day the business opened its doors.

Thanks.

So, I guess that means I should register with the Social Security Administration and handle my tax filings around November 3rd, regardless of the fact that I'm still covered under my current employer's insurance?

Also, I was wondering if anyone could maybe point me in the right direction regarding where to find information on how to fill out the forms for payroll taxes and other mandatory contributions. I think I've already figured out the percentages and the base amounts, but I'm still looking for things like the specific account numbers, the billing details, and all that sort of thing.

So, I headed down to the IRS office today, and my wife mentioned that I won't actually start paying those self-employment taxes until November 15th, provided I'm officially employed by then. I guess everyone seems to interpret these regulations a little differently, though. 😁

On another note, the folks over at JPMorgan Chase were telling me that if I don't register for sales tax, I might not even need to open a dedicated business account for my small business—that I could just keep using my personal checking account. It's probably the first time I've heard that suggested, so I'll likely give the IRS a call tomorrow just to double-check everything and be safe.

You have to open a checking account, but since it’s tied directly to you as an individual, it’s actually quite convenient. You only need one token for everything... and it's cheaper too.

A, okay, so I guess I'll need a checking account then, since right now I just have a basic one over at JPMorgan Chase.