Starting a small business

Susan Watson6 said:Hey there,
I’m planning on launching a sole proprietorship and hiring some employees.

I could really use some info—basically just looking for a little help to confirm I've got my facts straight:

Once I wrap everything up, I'll handle the registration, get a company seal made, open a business checking account, and file the RPO form to register as a taxpayer; what exactly comes next before I can actually start operating?

I'm assuming the next steps involve drafting the cash register limit regulation and an internal fiscalization policy? And am I correct in thinking I have to create both regardless of whether I plan to take cash or not?
If I do end up dealing in cash, will I need to go out and buy specific hardware and software for fiscalization and issuing receipts, and does anyone have a solid recommendation for those?

Also, regarding the timeline: if my official registration date is, say, April 28th, 2021, then the earliest I could realistically start working would be May 6th, 2021? Can I use those eight days to knock out all the previous steps like getting the seal, opening the account, and filing the paperwork?

As a sole proprietor who is already working for another employer, am I required to register with Social Security and Medicare, or am I exempt? It's pretty confusing because I read somewhere that I might still be obligated to pay contributions based on this second line of work.

Could you guys recommend a bank and let me know where I should open my business account? I'm curious about fees and which bank makes the whole process the most painless. Right now, everything I have is with Chase, so would sticking with them be the easiest route, or do other banks offer better perks? Edit: I already have an account with them; can I just repurpose that one, or am I forced to open a completely separate business account?

Yeah, you can definitely get all those things sorted during that 8-day window.

As a freelancer working for another employer, am I actually required to sign up with Social Security and Medicare? I’m a bit thrown off because I read somewhere that I'd still be on the hook for paying taxes based on this second gig.

You definitely have to sign up. I'm actually in the exact same boat—running a freelance business while working a regular job elsewhere.

Does anyone have recommendations or experiences with banks? Basically, where should I open my business checking account? What are the fees like, and which one makes the whole process the easiest? Right now, I do all my banking at Chase, so would sticking with them be the simplest move, or do other places offer better perks? Edit: I already have an account with them; can I just use that, or do I need a specific new one for the business?

You'll need to open a dedicated business account.

redridge35 said:Yeah, you can definitely get all those things sorted during that 8-day window.

As a freelancer working for another employer, am I actually required to sign up with Social Security and Medicare? I’m a bit thrown off because I read somewhere that I'd still be on the hook for paying taxes based on this second gig.

You definitely have to sign up. I'm actually in the exact same boat—running a freelance business while working a regular job elsewhere.

Does anyone have recommendations or experiences with banks? Basically, where should I open my business checking account? What are the fees like, and which one makes the whole process the easiest? Right now, I do all my banking at Chase, so would sticking with them be the simplest move, or do other places offer better perks? Edit: I already have an account with them; can I just use that, or do I need a specific new one for the business?

You'll need to open a dedicated business account.

So, you’re wondering how the whole Social Security thing actually works and when you're supposed to get your act together and file, aren't you? Basically, you just need to apply once you hit the eligibility age, though you can technically start looking into it a bit earlier depending on when you want that check to start hitting your account.

If you're looking for banking recommendations, I’m all ears—which ones actually offer decent fees and won't make opening or managing an account a total nightmare?
You can definitely open a checking account through Revolut, and I see they've got that Revolut business registration option available too if you're looking to go that route. If you’re actually considering revolut business registration, just know you're stepping into a world of bureaucratic headaches that even Chase couldn't dream of complicating.

Susan Watson6 said:So, you’re wondering how the whole Social Security thing actually works and when you're supposed to get your act together and file, aren't you? Basically, you just need to apply once you hit the eligibility age, though you can technically start looking into it a bit earlier depending on when you want that check to start hitting your account.

If you're looking for banking recommendations, I’m all ears—which ones actually offer decent fees and won't make opening or managing an account a total nightmare?
You can definitely open a checking account through Revolut, and I see they've got that Revolut business registration option available too if you're looking to go that route. If you’re actually considering revolut business registration, just know you're stepping into a world of bureaucratic headaches that even Chase couldn't dream of complicating.

If you’re looking to get your small business registered with Social Security and Medicare, don't sweat the timing too much—you can actually get that all squared away even if you've already officially opened your doors for business.

I’ve got my business account set up over at Chase, and honestly, I'm pretty sure the fees are basically the same no matter which bank you go with these days.

I can't really say much about Revolut, to be honest. I haven't spent enough time using it to give you a solid opinion.

Wait, isn't it true that the IRS just drops a decision on last year's contributions based on those PO-SD forms?
Look, you don't even have to worry about registering for Social Security or Medicare separately; you just pay whatever difference shows up on the IRS notice.

Brenda Wood3 said:Wait, isn't it true that the IRS just drops a decision on last year's contributions based on those PO-SD forms?
Look, you don't even have to worry about registering for Social Security or Medicare separately; you just pay whatever difference shows up on the IRS notice.

Actually, you really do need to register your small business with both Social Security and Medicare by filling out the necessary paperwork and dropping it off at the Social Security Administration and Medicare offices.

redridge35 said:Actually, you really do need to register your small business with both Social Security and Medicare by filling out the necessary paperwork and dropping it off at the Social Security Administration and Medicare offices.

Medicare just pulls it automatically from Social Security, so there's no need to report your business to them separately.

That’s what they told me too, but I ended up having to lug all those paper forms around to the Social Security office anyway. 😁

Can a sole proprietorship be registered at the owner's home address (like an apartment owned by a spouse), while the actual work happens in a rented commercial space? I mean, would that cause any headaches if an inspector shows up and sees no sign of the business at the official headquarters? Since there aren't any specific MTU requirements, maybe it wouldn't be an issue, I guess.

Susan Watson6 said:So, you’re wondering how the whole Social Security thing actually works and when you're supposed to get your act together and file, aren't you? Basically, you just need to apply once you hit the eligibility age, though you can technically start looking into it a bit earlier depending on when you want that check to start hitting your account.

If you're looking for banking recommendations, I’m all ears—which ones actually offer decent fees and won't make opening or managing an account a total nightmare?
You can definitely open a checking account through Revolut, and I see they've got that Revolut business registration option available too if you're looking to go that route. If you’re actually considering revolut business registration, just know you're stepping into a world of bureaucratic headaches that even Chase couldn't dream of complicating.

Chase

You can use Chime Business—you just have to report it to the IRS.

Roger Booth86 said:Can a sole proprietorship be registered at the owner's home address (like an apartment owned by a spouse), while the actual work happens in a rented commercial space? I mean, would that cause any headaches if an inspector shows up and sees no sign of the business at the official headquarters? Since there aren't any specific MTU requirements, maybe it wouldn't be an issue, I guess.

In that scenario, just register the business at your partner's address and then register the rented space as a separate branch location.

I’m running a small business under the simplified tax system—basically just an LLC owner working about 40 hours a week.

Do I still have to cough up all those same payroll taxes and social security contributions?

Casey Perez6 said:I’m running a small business under the simplified tax system—basically just an LLC owner working about 40 hours a week.

Do I still have to cough up all those same payroll taxes and social security contributions?

Yeah, you do—but it’s just the annual tax based on your specific bracket, roughly 17.5% of your taxable income.

Hey team,

Quick question for you all...
So, I’m looking at setting up a small sole proprietorship for some equipment rentals—basically renting stuff out at various sites. Word on the street is that I need a dedicated warehouse to store everything.
Does that actually mean I can't just keep the gear at my place? Apparently, I need a specific 60-square-foot storage unit or a garage officially zoned for that kind of thing.
Is there any way around this bureaucracy? It seems like people have been opening rental businesses forever without all these hoops, yet now everyone is saying I need a formal warehouse for the inventory.
Any advice would be appreciated...

Hey there,

Maybe I'm just overthinking this, but I can't seem to find a straight answer anywhere...
Is it actually okay to use a newly opened personal checking account for my sole proprietorship? Basically, an agent from the IRS told me I needed to get an account set up before I even officially received my business registration or tax ID. So, I've been running everything through this personal account for two months now... and suddenly, total panic mode has kicked in. To make matters worse, when I was at the bank, I told them exactly what I needed and the teller was just like, "Yeah, sure, that works fine." So, apparently, it's all good?
The thing is, I haven't used this account for anything other than business stuff. But if I eventually need a dedicated business account, what happens to the money sitting in this personal one?

From what I gather about running a small business, you really need a dedicated commercial checking account under the business's legal name. A personal account is a totally different beast—if you're looking at JPMorgan Chase, for example, their consumer app and their business banking platform are two completely separate worlds.

Yeah, you'll definitely need a business account. You can't really get one set up until you have your LLC registration, your articles of incorporation, and all that other paperwork ready to go. Maybe a corporate seal too...

Drew Allen77 said:Yeah, you'll definitely need a business account. You can't really get one set up until you have your LLC registration, your articles of incorporation, and all that other paperwork ready to go. Maybe a corporate seal too...

I just started my own small LLC recently, and honestly, I haven't had any use for a company seal yet.

Hey everyone!

I’ve got a question regarding sole proprietorships—specifically how the tax side of things works. What happens to the cash sitting in my business account at the end of the year? For instance, if I have $6.75 left over and I don't plan on withdrawing it before the year wraps up, does that amount count as taxable profit for the following year? Basically, if I start January with a balance of $6.75, am I being taxed on that existing cash as if it were new income for the new year?

Also, what's the standard procedure when a client pays in cash? Say I issue an invoice, they hand me the cash directly, and then I take it down to the bank to deposit it into my business account. Is that the right way to handle it?

Question:
If I am currently unemployed and dealing with an active wage garnishment, am I still permitted to open a sole proprietorship? If so, what specific requirements or documentation would I need to satisfy?

I just started my own small business, and the next step is getting a business account set up. I’m wondering if Square works for handling client payments. Basically, I want to receive funds directly into that account—once I send an invoice, the money should land in Square, just like it would if I were opening an account at somewhere like Bank of America or Chase...
Also, I’ve been told I need to draft and notarize some kind of statement or affidavit confirming that I’ll be operating strictly through cashless transactions. Does that need to be officially certified somewhere? And what does a document like that actually look like?
Thirdly, my business is registered at my parents' house. I’m living there, but I don't own the property. I'll need to provide some sort of lease agreement or written permission proving they're allowing me to run my business out of their home. What’s the standard procedure for this? Do I need to go see a notary, and is there a specific amount I'm required to pay them for the use of the space? Thanks!