Week 6 Reflection (B250)

This past week has been incredibly insightful and frightening at the same time. I learned about choosing a legal structure and understanding taxes. There was a lot of information to absorb as I studied various websites for hours trying to understand exactly what I need to do in order to keep my website legal and risk free.

I found this website very insightful for the state of Tennessee, which is where my location will be based out of:
http://www.tn.gov/ecd/topic/how-to-start-a-business

On step 2, it lists each legal structure and it looks at the pros and cons of each option. This website also gave me a good foundation of the requirements for starting a business. It is a trustworthy source because it is a .gov website. I think that it is so important to get information form a reliable source because it could save you from conflict down the road.

Here is my thought process while researching these topics (for personal, future reference):

Licenses, Permits, and Special Regulations

Business licenses- My city requires that you get a business license if you gross more than $3000 a year in receipts. I don’t expect to make more than $3000 in a year.
http://www.murfreesborotn.gov/index.aspx?NID=133
DBA- This article recommends that I get a DBA because the name of the business (Boho and Basil) will be different than my legal name.

https://smallbiztrends.com/2012/03/does-your-business-need-a-dba.html
Permits/ Special Regulations- None that I can find

Income Tax

Federal income tax-

https://www.irs.gov/businesses/small-businesses-self-employed/business-taxes
State income tax- There is no state income tax in Tennessee

 Sales Tax

State- If you sell more than $4800 a year in revenue, then you’re required to register your business for sales tax. I don’t think that I will make that much so for now I do not need to register for sales tax. However, I will still need to register my business for taxes (http://www.tn.gov/revenue/article/register-with-revenue). The cost is $15 and I am in classification 3.

 

https://revenue.support.tn.gov/hc/en-us/articles/204309679-I-m-setting-up-an-online-business-in-Tennessee-Am-I-required-to-collect-Tennessee-taxes-
National- My business is not known as a nexus and therefore does not require me to include sales tax.
https://www.sba.gov/starting-business/learn-about-business-laws/online-business-law/collecting-sales-tax-online
Local-Same as above with the state tax. I will not be making enough to have to pay sales tax in my county.

 

There has been a lot of information to take in, but I feel confident in moving forward with this business and the legal structure.

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