Starting a small business

steelfalcon60 said:Hello,
I’ve finally decided to take the plunge and start my own small business, so I have a few questions I'm hoping someone can help me clear up.
Is running a sole proprietorship essentially the same as forming an LLC in terms of scope? Specifically, am I allowed to list various services under my business umbrella regardless of my specific educational background?
I fully understand that to actually perform certain specialized tasks, I need to have a qualified professional on staff. For instance, I am trained as a civil engineering technician, whereas my wife is a licensed hairstylist. Would it be possible for me to register her profession as part of my business right from the start, even if I don't personally hold those certifications myself?

Regarding the monthly overhead and tax obligations, they seem to be around $643? At least, that is what I’ve managed to gather from the discussions here on the forum.

As for my business address, I plan to use my current residence, but I don't actually own the apartment. Is showing my ID sufficient for registration, or will I need to provide a formal lease agreement?

Also, is it actually possible to qualify for any kind of small business grants or government incentives?
Everyone seems to be talking about them, but unfortunately, I haven't been able to find any concrete information or actual applications...

One last thing—will I run into any legal or administrative hurdles when trying to set up the business if I currently have a freeze on my personal bank account?

I'll answer based on what I know, and hopefully, someone else can jump in or you can check with the local Small Business Administration office for the rest.
As for registering service categories that you won't be performing immediately (like for your wife), your best bet is to ask at the local Chamber of Commerce; they can give you a definitive answer on the spot.

Monthly contributions usually hover around $643. Once you close out your fiscal year, if your business code falls under certain industry assessments, your accountant will calculate those fees, and the IRS will bill you via monthly prepayments.
You also have to pay some minor environmental fees, but we're talking tiny amounts here—about 0.0265% of your total annual gross receipts.

You definitely need a lease agreement, regardless of whether you own the property or not. You don't necessarily need to have it notarized, but you do need to submit it to the local tax authorities so the landlord can properly account for their taxes.

Grants are definitely an option. If you are currently unemployed and registered with the unemployment office, go see them before you officially launch. Ask to speak with a caseworker and have them walk you through the specifics. That is your safest route because they will know exactly what you qualify for based on your specific status.

Having a frozen personal bank account won't affect your ability to open the business.

Greetings, everyone. I am seeking some guidance, if anyone is inclined to offer it. I am currently developing a cosmetic product and intend to launch it via an e-commerce storefront, but I find myself questioning the most logical starting point. Where does one actually begin? I am aware that the product must undergo rigorous regulatory testing and compliance checks required for cosmetics in the US... ANY ASSISTANCE WOULD BE APPRECIATED.

Hey everyone! :-) So, I’m seriously considering launching my own small business as a tour guide/escort, but I am getting some seriously conflicting info. I ran into a colleague yesterday who told me my monthly overhead would be around $433... but now I’m scrolling through this forum and seeing numbers closer to $667. Now, he’s based out in Des Moines, so I'm wondering if that's why the math isn't adding up? I'm over here in Washington, D.C., so maybe there's a regional difference?
One more thing—can one small business cover multiple niches? Like, could I offer guided tours and also sell handmade souvenirs under the same umbrella?
And another question🙂: do I absolutely need to hire an accountant, or am I allowed to handle my own bookkeeping? I don't mean right at the start—I’ll definitely be hitting up an accounting firm to get things set up properly—but once I actually find my rhythm, can I fly solo?

granitedriver822 said:Hey everyone! :-) So, I’m seriously considering launching my own small business as a tour guide/escort, but I am getting some seriously conflicting info. I ran into a colleague yesterday who told me my monthly overhead would be around $433... but now I’m scrolling through this forum and seeing numbers closer to $667. Now, he’s based out in Des Moines, so I'm wondering if that's why the math isn't adding up? I'm over here in Washington, D.C., so maybe there's a regional difference?
One more thing—can one small business cover multiple niches? Like, could I offer guided tours and also sell handmade souvenirs under the same umbrella?
And another question🙂: do I absolutely need to hire an accountant, or am I allowed to handle my own bookkeeping? I don't mean right at the start—I’ll definitely be hitting up an accounting firm to get things set up properly—but once I actually find my rhythm, can I fly solo?

Coming from Appalachia, I was told my Social Security and Medicare contributions would come out to roughly $1000 per quarter, though I haven't received any official paperwork yet—it might be best to check directly with your local IRS office.

granitedriver822 said:Hey everyone! :-) So, I’m seriously considering launching my own small business as a tour guide/escort, but I am getting some seriously conflicting info. I ran into a colleague yesterday who told me my monthly overhead would be around $433... but now I’m scrolling through this forum and seeing numbers closer to $667. Now, he’s based out in Des Moines, so I'm wondering if that's why the math isn't adding up? I'm over here in Washington, D.C., so maybe there's a regional difference?
One more thing—can one small business cover multiple niches? Like, could I offer guided tours and also sell handmade souvenirs under the same umbrella?
And another question🙂: do I absolutely need to hire an accountant, or am I allowed to handle my own bookkeeping? I don't mean right at the start—I’ll definitely be hitting up an accounting firm to get things set up properly—but once I actually find my rhythm, can I fly solo?

You certainly can, provided that you are actually making the items yourself. If you were reselling goods made by others, you would need to register as a retail business instead.
If your plan involves selling those souvenirs to customers at a booth or through an online shop, you will need to register those specific sales activities as well. Your local Chamber of Commerce should be able to point you in the right direction there.
In that scenario, you would also fall under sales tax regulations—you likely won't need a heavy-duty commercial register, but you will need to ensure your receipts are properly documented for the tax authorities.
I am also somewhat unsure how you intend to charge for your guiding services; if you take cash payments, you'll definitely be subject to sales tax reporting. It would be wise to consult with the IRS regarding that.

granitedriver822 said:Hey everyone! :-) So, I’m seriously considering launching my own small business as a tour guide/escort, but I am getting some seriously conflicting info. I ran into a colleague yesterday who told me my monthly overhead would be around $433... but now I’m scrolling through this forum and seeing numbers closer to $667. Now, he’s based out in Des Moines, so I'm wondering if that's why the math isn't adding up? I'm over here in Washington, D.C., so maybe there's a regional difference?
One more thing—can one small business cover multiple niches? Like, could I offer guided tours and also sell handmade souvenirs under the same umbrella?
And another question🙂: do I absolutely need to hire an accountant, or am I allowed to handle my own bookkeeping? I don't mean right at the start—I’ll definitely be hitting up an accounting firm to get things set up properly—but once I actually find my rhythm, can I fly solo?

You are permitted to handle your own bookkeeping, but I do think having a professional assist you during the startup phase is a prudent move. You can work together to set up an Excel spreadsheet to track all incoming and outgoing invoices, expenses, and so on... and they can review your invoice templates to ensure they are compliant.
An accountant will become quite necessary when it comes time to file your annual tax returns after the first year. Please do not forget—as I have seen some people overlook this—that in addition to the Social Security and Medicare contributions you pay now, you will also be responsible for income tax next year.

Brenda Chase3 said:I'll answer based on what I know, and hopefully, someone else can jump in or you can check with the local Small Business Administration office for the rest.
As for registering service categories that you won't be performing immediately (like for your wife), your best bet is to ask at the local Chamber of Commerce; they can give you a definitive answer on the spot.

Monthly contributions usually hover around $643. Once you close out your fiscal year, if your business code falls under certain industry assessments, your accountant will calculate those fees, and the IRS will bill you via monthly prepayments.
You also have to pay some minor environmental fees, but we're talking tiny amounts here—about 0.0265% of your total annual gross receipts.

You definitely need a lease agreement, regardless of whether you own the property or not. You don't necessarily need to have it notarized, but you do need to submit it to the local tax authorities so the landlord can properly account for their taxes.

Grants are definitely an option. If you are currently unemployed and registered with the unemployment office, go see them before you officially launch. Ask to speak with a caseworker and have them walk you through the specifics. That is your safest route because they will know exactly what you qualify for based on your specific status.

Having a frozen personal bank account won't affect your ability to open the business.

To be honest, I was previously advised that if I were to start a small business while carrying existing debt, my business checking account would likely be frozen immediately because the IRS uses the same Social Security number for both me personally and my business entity. That specific concern is actually what led me to consider forming an LLC instead.

Where exactly could I verify this information?

granitedriver822 said:Hey everyone! :-) So, I’m seriously considering launching my own small business as a tour guide/escort, but I am getting some seriously conflicting info. I ran into a colleague yesterday who told me my monthly overhead would be around $433... but now I’m scrolling through this forum and seeing numbers closer to $667. Now, he’s based out in Des Moines, so I'm wondering if that's why the math isn't adding up? I'm over here in Washington, D.C., so maybe there's a regional difference?
One more thing—can one small business cover multiple niches? Like, could I offer guided tours and also sell handmade souvenirs under the same umbrella?
And another question🙂: do I absolutely need to hire an accountant, or am I allowed to handle my own bookkeeping? I don't mean right at the start—I’ll definitely be hitting up an accounting firm to get things set up properly—but once I actually find my rhythm, can I fly solo?

Small business owners on a flat tax or seasonal workers usually pay about $433 a month in taxes and fees. That's roughly what I'm looking at too. As for specific industries, I can't say for sure. Those on the flat tax system don't bother with formal bookkeeping. We just have to file a single summary form every January. It’s basically just one sheet of paper where you jot down your total income for each month from the previous year.

Harold White5 said:To be honest, I was previously advised that if I were to start a small business while carrying existing debt, my business checking account would likely be frozen immediately because the IRS uses the same Social Security number for both me personally and my business entity. That specific concern is actually what led me to consider forming an LLC instead.

Where exactly could I verify this information?

Your original question was: "Will I run into issues starting a sole proprietorship if my personal bank account is frozen?" and my answer was that a frozen personal account has absolutely nothing to do with starting a business. The Secretary of State won't stop you from registering a business just because you have a personal account issue.
What you're asking about now is a different matter entirely. I haven't dealt with this personally, but I recall reading somewhere that they could potentially freeze your business account if you haven't settled certain personal debts, since for a sole proprietor, there isn't really a legal distinction between personal and business funds—you're basically operating out of the same pocket. I wonder if anyone else here knows if that's how it works.

Hey there,
So, here’s the deal: I’ve finally decided to take the plunge and open my own massage and beauty salon. I’m planning to set it up as a sole proprietorship. Now, look, I’ve already got the formal training under my belt for massage therapy, but I’m hitting a bit of a wall regarding the rest of the lineup. Does anyone out there know if I need specific additional courses or official certifications for every single service I plan to offer at the shop? 🤔 For instance, I’m looking at providing waxing, eyebrow shaping and tinting, lash extensions... and all that good stuff.
Thanks in advance for any insight you can share! 😉

To whom it may concern,

I registered a secondary occupation with a start date of April 1, 2016, and subsequently received a notice from the IRS on June 6, 2016, demanding contribution payments.

The assessment includes employment tax contributions; however, according to certain industry guidelines, such contributions should not apply to individuals performing secondary work who are not otherwise covered under any other insurance basis.

Under which specific statute or article have they implemented these mandatory employment taxes? Despite my thorough reading of the Federal Register and my formal inquiries to the IRS, I can find no legal basis for this requirement...

Does anyone happen to have insight into this?

Thank you in advance.

Regards.

Does anyone happen to know if a small business started this year is actually required to pay that $50 membership fee to the American Academy of Arts and Sciences? I'm asking because it's showing up as an outstanding balance on my tax filings, but I heard through the grapevine that you don't have to cough up that amount during your first year of operation. Thanks!

Laura Castillo6 said:Does anyone happen to know if a small business started this year is actually required to pay that $50 membership fee to the American Academy of Arts and Sciences? I'm asking because it's showing up as an outstanding balance on my tax filings, but I heard through the grapevine that you don't have to cough up that amount during your first year of operation. Thanks!

Yes, they should have also sent you an official determination notice from the chamber by now.

Thanks for the heads-up, though I haven't actually seen any kind of official resolution on my end yet. It’s funny you mention those solutions, because I feel like I’ve been left hanging on quite a few of them lately. To be honest, I'm a little confused as to why someone at the local Chamber of Commerce told me I wouldn't need to pay anything—it makes me wonder if they actually know what's going on over there. But until I see some concrete proof, I'm not planning on handing over any money. I mean, based on what exactly? Unless there was some sudden change in the law that I missed. Do you happen to know which specific US regulation governs these HOK payments?

Chamber of Commerce Assessment Regulations, Federal Register Vol. 141/15.
I wouldn't recommend sending any payments until you actually receive the official assessment notice in the mail; that document will explicitly state the exact deadline and the specific account where the funds should be deposited.
Did you happen to register your small business quite recently?
In my own experience, I actually received the paperwork from the Chamber of Commerce before the IRS even sent out my assessment for those fees... and yet, some people are still sitting around waiting indefinitely for theirs to arrive...

Let’s say I set up a small side business—something I only pick up when a gig actually lands on my desk. What am I looking at in terms of monthly overhead? My apologies in advance, but I honestly don't have a clue how any of this works.

Suppose my annual revenue swings wildly—one year it’s $1,000, the next it’s $10,000, then maybe $100,000, or even $333333. How does that all play out? These sole proprietorships are a total mystery to me.

EDIT: Let me rephrase. What I really mean is I want to dip my toes into the entrepreneurial world, maybe eventually scaling up to a full-blown LLC.

The reality is, I have zero idea if this business is actually going to take off or just tank.

I’m reading through this and I’m still totally lost. Since I already have a regular job, am I actually required to shell out those monthly contributions of $667 every single month? Like, seriously? 🤷 What happens if I land some freelance gigs one month but nothing the next? Or what if my side business just goes completely dead for six months straight? wtf?

stormytinker40, you should probably head over to your local Small Business Administration office and ask them about setting up a sole proprietorship with full-time employees. If I recall correctly, in that specific setup, you aren't on the hook for those heavy payroll taxes—you just handle the standard income tax and local surcharges based on your revenue. Another way to kick things off might be to handle those initial freelance gigs through independent contractor agreements instead.

On a different note, regarding those Chamber of Commerce fees... I recently received a notice from my local trade association, and apparently, we aren't required to pay those membership dues during our first year of operation. It seems like my billing statement was generated automatically by their system, so now I’ve somehow ended up subscribed for an entire year...

stormytinker40 said:I’m reading through this and I’m still totally lost. Since I already have a regular job, am I actually required to shell out those monthly contributions of $667 every single month? Like, seriously? 🤷 What happens if I land some freelance gigs one month but nothing the next? Or what if my side business just goes completely dead for six months straight? wtf?

Your best bet would be to just set up a sole proprietorship... basically, you can't make more than $50 a year, you can't deal with sales tax registration, and you can't get into retail or restaurant stuff...

If you check all those boxes, it’s definitely your cheapest route.

While you're working, you'd pay income tax quarterly—and then handle your social security/contributions once a year based on your total annual earnings...

You can dig into the details here:

Dennis Cooper3 said:stormytinker40, you should probably head over to your local Small Business Administration office and ask them about setting up a sole proprietorship with full-time employees. If I recall correctly, in that specific setup, you aren't on the hook for those heavy payroll taxes—you just handle the standard income tax and local surcharges based on your revenue. Another way to kick things off might be to handle those initial freelance gigs through independent contractor agreements instead.

On a different note, regarding those Chamber of Commerce fees... I recently received a notice from my local trade association, and apparently, we aren't required to pay those membership dues during our first year of operation. It seems like my billing statement was generated automatically by their system, so now I’ve somehow ended up subscribed for an entire year...

Carol Price4 said:Your best bet would be to just set up a sole proprietorship... basically, you can't make more than $50 a year, you can't deal with sales tax registration, and you can't get into retail or restaurant stuff...

If you check all those boxes, it’s definitely your cheapest route.

While you're working, you'd pay income tax quarterly—and then handle your social security/contributions once a year based on your total annual earnings...

You can dig into the details here:

Thanks a ton for all the replies!

I currently run a small seasonal business where I pay about $667 per month in self-employment taxes, and my day-to-day involves working in a gift shop.

Now, I'm looking into launching a second venture—something in the sweets and ice cream industry. However, this won't be a hands-on role for me; I'll actually need to hire someone to run the shop. My big question is: as the owner of this new business, will I be on the hook for another $667 in monthly tax obligations, similar to what I'm already paying for my first business?

Thanks so much for any insight!

hiddenbear3 said:I currently run a small seasonal business where I pay about $667 per month in self-employment taxes, and my day-to-day involves working in a gift shop.

Now, I'm looking into launching a second venture—something in the sweets and ice cream industry. However, this won't be a hands-on role for me; I'll actually need to hire someone to run the shop. My big question is: as the owner of this new business, will I be on the hook for another $667 in monthly tax obligations, similar to what I'm already paying for my first business?

Thanks so much for any insight!

No, you won't. Under the Small Business Act, there isn't really a provision for a single sole proprietor to hold multiple separate business licenses—unless, of course, you're entering into a partnership with someone else. Honestly, there's no need to go through the headache of opening an entirely new business entity; you can simply register these new activities under your existing small business.