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    Starting a Sole Proprietorship
    Hey Everyone,

    I would like to start a part time photography business as a sole proprietorship in NJ(Bergen county). The government web sites are not very helpful. From what I have learned so far I need to register with the county clerk and possible get a federal tax ID.

    Is there anyone here familiar with the process in NJ? Am I on the right track. Do I need a federal tax ID? .

    Any other advice or suggestions are welcome.

    Thanks for your help!
    John


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    Re: Starting a Sole Proprietorship
    I'm not from NJ, but here in California, I didn't need to file a federal tax ID. I would only have needed to do that if I were to hire employees. Otherwise, I file the taxes under my own SSN. The only things I needed to get was a state seller's ID and my city's business license.


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    Re: Starting a Sole Proprietorship
    *Warning: There are indeed a lot of people out there trying to take advantage of newbies. I saw one website that charged $150 for an EIN, which is free online at the IRS. That's crazy!

    You can create a legitimate business for virtually zero cost. A sole proprietorship is absolutely free! At minimum, you don't need to file any paperwork or applications or have any need for a lawyer at all. Do not listen to a lawyer who says otherwise. Please visit the IRS website for confirmation of these facts.

    The steps for completing the process of forming your own business are different depending on which type of business entity you chose to become. Let's assume you plan on working from your home with no employees, for now. Which business type do you want to create?

    For a Sole-Proprietorship (only one owner)

    1. Choose a name for your business
    2. Get a DBA (or Assumed Name) for the name of your business from your County Clerk. Cost: Usually $10
    3. If you will have employees, get a federal EIN from the IRS. Otherwise, you can just use your social security number at tax time. Cost: Free of charge.
    4. Get a sales tax permit or ID number from your State. Cost: Usually free

    For a Partnership (two or more owners)

    1. Choose a name for your business
    2. Get a DBA (or Assumed Name) for the name of your business from your County Clerk. Cost: Usually $10
    3. As a partnership, you are required to get a federal EIN from the IRS whether or not you will have employees. You will use the EIN instead of your social security number at tax time. Cost: Free of charge
    4. Get a sales tax permit or ID number from your State. Cost: Usually free

    For a LLC (one or more owners)

    1. Choose a name for your business
    2. Register your company with the Secretary of State to get a Certificate of Organization (or Articles of Formation). Cost: $50-500, depending on State
    3. As an LLC, you are required to get a federal EIN from the IRS whether or not you will have employees. You will use the EIN instead of your social security number at tax time. Cost: Free
    4. Get a sales tax permit or ID number from your State's Comptroller of Public Accounts. Cost: Usually free

    Here is a chart comparing the business entities:

    http://www.irs.gov/businesses/small/...=98191,00.html

    Apply online for an EIN and get help for small businesses at the IRS website:

    http://www.irs.gov/businesses/small/index.html

    As you can see, you only need an EIN if you are a sole proprietor who is going to have employees. Otherwise you will just use your social security number on your tax return 1040 along with Schedule C outlining the business income and expenses. If you earn over $400 per year in business income, then you must pay 27% income tax on those profits. You will also need to pay quarterly estimated tax deposits every three months.

    Hope this was helpful.

    http://www.cluemein.net/smallbusiness


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    Re: Starting a Sole Proprietorship
    Thanks for the responses, that was extremely helpful!

    I'm just looking to start a sole pr. with no employees so the first one you outlined will be fine.

    Talk to you later,
    John


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    I appreciate the detailed information regarding sole proprietorship. I make some money writing online, but I live in an area where I could so easily make money at fairs, festivals, auctions, and other such events. Going legitimate, so to speak, rather than just trying to sell as if I were holding a garage sale would add some respect to the business I am trying to plant. I aim toward making some cash and then trying to make that cash grow. Does anyone have any suggestions on how a rookie business owner can make small amounts of cash safely multiply at decent rates of time?


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    I live in the UK not the US so things are a bit different here. I'm sure you will find the answer if you do some digging around and research on the web. Here we have the Citizens Advice Bureau that are excellent for many money related queries. They are great if you are in debt or struggling financially. I would say it's best to stick to the rules and file a tax form if that's what your district requires from you.


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    great advice very helpful people


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