Tax Id, and other tax business

Are you operating as a named business or under your own name? If it's a business then you need to establish it as such. If you are providing your time as 'shewolfnm' then your clients might, in fact, be hiring you as an employee, such as a babysitter, and be required to pay SS taxes on you and withhold taxes from your pay. If you are self-employed in a business then you have to pay both portions of the SS tax.

I dont have a business name.

When checks are written out, they are written to my name..
just like a personal check..

You're an honest woman shewolf.

I'm not, and it sure doesn't keep me up at night.

On my business I write off everything -- even things I don't buy such as a new computer evey year, accessories and a new printer. Also, I try to do as much business in cash as possible. Cash business does not have to be reported.

Damn, I'm glad this forum is anonymous!

You and me both...damn girl, these checks are just made out to you name with no explanation on them....when you get cash do you give a receipt?

Is anyone going to send you an I-9? (that's the form a cutomer would send you saying you worked for them and they paid you x amount of dollars.

You have to claim anything you get on an I-9, as a copy goes to the irs, but I'd damn sure write something off against it.

You're not registered, meaning, this is just something you started doing, without any paperwork? No record of you being a business?

sheeeeeeeeeeet..........

File a schedule C for self employment. You use your SS# and just tell the government how much you made total, what your expenses were to generate that money and then pay FICA and income tax on the profits. You don't need to make money every year to file a schedule C. You just have to make some profit 3 out of 5 years. (I think it is 3 out of 5) Failure to make a profit for those 3 years means the IRS will classify it as a hobby and not a business. You don't have to have much profit, $1 will get you there.

A 1099 is the form someone will file if they pay you more than $600? for the year. The IRS looks at those 1099s and your business had better gross at least that amount or they will ask questions.

You might want to consider a seperate bank account for your business. Not that you have to, but then you can point to what money was actually earned and spent if audited. Do you really want to have to answer to the IRS for that $500 check from your great aunt Martha you deposited in your personal account and have to prove it wasn't business related.

The real consideration is sales tax. Is what you are selling not subject to sales tax in your state? Some states don't tax services but some do. It is sales tax that could get you into big trouble. You will need to check with your state to see if you need a state tax ID for the product or service you are providing.

oh sorry, I did mean 1099...I-9 is citizenship thing

I can't advise on details, because Canadian laws and gov't jargon will be different than American (although the intent and result is amazingly similar). But it's probably an excellent idea to register your business despite the additional bookkeeping that entails.

As NickFun and parados have pointed out, there are a lot of advantages to owning a business, no matter how small. I'm a one-person interior design corporation, operating out of my home. That means that I can deduct up to 30% of all household expenses (taxes or rent, insurance, utilities) as business "rent". Little expenses as well -- things like coffee, toilet paper, computer and desk supplies -- can be a complete deduction (as long as you have income from which to deduct it). My company pays a mileage charge for the use of my car, and yes, sometimes a little personal stuff slips in there. If I had a child, daycare expenses would be deductible. ****, I've paid so little tax over the years because of all these things that it's almost embarassing.

Incorporation is just an additional formality. It has it's own paperwork & burdens, but the advantage to me is that if a client or supplier ever wanted to sue, they can only touch the legal assets of the company, not my personal assets. I don't ever want to be in that position, but I feel better knowing that I have that protection.

I'm sure that there are information packages available from the governments -- local, state & federal -- on the rules and how to set up a small business. Even a local chamber of commerce would probably be a great help.

I just remembered -- when I started out, I paid for a couple of hours time from an expensive accountant who specialized in small business. That was money well spent.

I don't do my own bookkeeping (a family member does) but I believe there are inexpensive computer programmes (Quicken, Simply Accounting, etc.) that are simple enough to help you do this task.

Lots of really useful stuff here:

http://www.sba.gov/

Parados answered the tax id number question, and many more, but I'll amplify. Do not get a federal tax id number. It is the EIN, or Employer Identification Number, and as soon as you get one, the IRS is going to expect you to file forms 941, and 940. If you never have employees, you don't need the hassle. They are easy forms, but why take on one more chore that pays nothing.

Agree, again, on the sales tax issue if it applies in Texas. Colorado has no sales tax on services, New Mexico does. My company has never done work in Tx, so, I don't know.

On the issue of form 1099, the amount is still $600.00. It is your customer's responsibility to complete the form. It is not your job to remind them. If they are going to, they will ask you to complete a W-9. If you take on small business customers, they will definately get a W-9 from you.

On social security, yes, you have to pay both the employee and employer taxes (the employer part is a tax deduction, for whatever that's worth), but you are only required to do so when your income (NOT gross revenue) exceeds $400.00.

Separate bank account for the business is a great idea. Setting up a business account can be difficult if you're not dealing with really large sums, so, tell them you want a DBA (Doing Business As) account, which is really a personal account used for businesses.

Could you tell us, what business, advertised on the LIST, you're in that generates $900/month?

House cleaning at an hourly rate.

the amount each month changes because of that. But a good average is 900.00 a month