Starting a Business - 5 Things to Make Your Home Business Legal

If you're going to make money with your new business, you know the IRS is going to want to know. Check your state's rules on reporting of income and to what extent it is necessary to submit a Schedule C, but it would be a good idea to plan ahead and anticipate will be carried out in that Schedule C next year! To prepare, you need to get your business legal. Here are some tips to help make this process smooth and simple as possible.

1. Name the business - can be as simple as using the last name, eg "John Smith Productions" or "Robert Travis Enterprises". Or you can get more creative and use a DBA (Doing Business As) or ABN (false name of business). If you decide on the name of a business that is anything but your true and legal name (ie John Smith), you must register your DBA for a fee. This can vary from state to state, but the average is about $ 50 and must be renewed every 2 years. You can find details on this at the Business.gov website.

2. Decide on your business entity - Before submitting the first Schedule C, you need to know if you're labeling your business as a sole proprietorship, LLC or a Corporation. There are pros and cons for each option. Before you decide, you may want to create a business plan. You can learn about business plans, business entities, and find a lot of other advice to small business Small Business Administration at sba.gov. You might also want to discuss these options with your accountant or tax adviser.

3. Register your name and the entity with your state. You can also find instructions for doing this, the sites mentioned above.

4. Check licenses - Look at your postal code to Business.gov to see what additional fees that may be required to report for your business and / or licenses you may need to acquire.

5. Find out what your tax liability - Owning your own business also means following a different set of rules, and while there are many amazing benefits to being independent, will be an advantage if you are proactive in learning the ins and outs of deductions Schedule C, and which are at your disposal. -Go see the Small Business-Resources to IRS.gov to learn everything you need to know.

It 'easy to just start a home business without thinking about how the government might want to be involved, however, is extremely important to remember that the tax-time comes, and it is best to prepare for this before starting your business. Do it right the first time, and you will save a lot of problems down the road ....