| Starting an online business can seem
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| | the license comes from the county.
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| overwhelming at first. Finding the right
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| | Fictitious Business Name
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| domain name, getting reliable hosting,
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| | If your business uses a name other than
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| web design, and figuring out credit card
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| | your own, then it is required by the
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| transactions are full-time concerns. One
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| | Trade Name Registration Act for you to
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| often-overlooked component is taxes. If
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| | register the fictitious name (which is
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| your website is selling something
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| | also known as D/B/A, doing business as).
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| tangible, you are required by law to
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| | It verifies that you and your business
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| report it. Leafing through the myriad of
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| | are one and the same. Depending on where
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| tax rules and regulations is frightening,
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| | you live, the form is usually filed at
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| and some just ignore it altogether (at
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| | the county clerk's office.
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| the risk of being audited). However, if
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| | Trademarks
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| you want to save yourself from future
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| | Domain names are a large part of your
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| headaches and lawsuits, it's best to get
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| | internet business, and protecting it is
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| everything straightened out as soon as
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| | essential. A trademark identifies the
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| possible.
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| | source of goods or services to the
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| Do I need a tax ID number?
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| | consumers. You cannot register a domain
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| An Employee Identification Number
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| | name by itself, because just the name is
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| (sometimes called Federal Tax ID number)
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| | merely an address. However, your online
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| is a nine-digit number assigned by the
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| | business name can be trademarked if it
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| IRS that identifies your business to the
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| | provides a service to consumers, such as
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| government. You will need to get one if
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| | booking flights, research on parenting,
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| one or more of these apply:
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| | comparing insurance companies, etc. If
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| 1.You pay wages to any employees.
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| | you create items that you sell on your
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| 2.Your business is a corporation or
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| | website, those product names can be
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| partnership.
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| | trademarked.
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| 3.You file pension or excise tax returns.
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| | To learn more about trademark rules, go
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| If you are the only employee for your
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| | to
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| business, then you can run your business
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| | Sales Tax
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| as a Sole Proprietorship entity, and use
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| | Each state issues a sales and use tax
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| your Social Security Number as your EIN.
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| | which applies to the use or consumption
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| However, you should look at all of the
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| | of tangible personal property and certain
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| business structures before you decide
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| | services. If you sell something tangible,
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| which one is right for your business.
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| | tax must be collected. However, if you
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| What are my business entity options?
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| | sell an e-book, it might not have to be.
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| A Sole Proprietorship is the most common
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| | A sales tax number is required for each
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| for an upstart online business. It is
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| | business before opening, and the rules
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| owned and maintained by one individual,
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| | are different in every state, so this is
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| and has no existence apart from that
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| | something you need to look into. I live
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| individual. All the income and expenses
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| | in Missouri, and according to Missouri
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| are on your personal tax return (form
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| | state law, I am subject to sales tax if
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| 1040). It is the simplest form of
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| | the product's shipping and delivery
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| business. However, you are personally
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| | points are both in Missouri. However,
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| liable for your company's liabilities. If
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| | your state might be different.
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| someone sues your business or your
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| | Self-Employment Tax
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| business gets too far into debt, your
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| | Self-employment tax (SE tax) is for
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| personal assets can be seized.
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| | individuals who work for themselves, and
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| A Partnership involves two or more people
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| | is a social security and Medicare tax.
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| who share the profits, or losses, of the
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| | You must pay the SE tax and file Schedule
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| business. It's just like a Sole
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| | SE on Form 1040 if your net earnings from
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| Proprietorship, except you need an EIN.
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| | self-employment equaled or exceeded $400.
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| Also, profits, losses, and liabilities
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| | To figure your net earnings, multiply
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| are split between the partners.
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| | your total earnings subject to the SE tax
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| A Corporation is a separate legal entity
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| | by 92.35%. You will be taxed 15.3% on the
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| from the individuals who started it. It
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| | net earnings.
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| can be taxed and is legally liable for
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| | What can I deduct?
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| what it does. The benefit of a
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| | As far as deducting part of your home as
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| corporation is that its corporate status
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| | a business expense, that only works if
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| does not hold the employees liable. The
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| | that part of your home is exclusively for
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| downside is that it is expensive to
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| | business. If your computer and desk are
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| start, and requires a lot of bookkeeping.
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| | in the living room, that square footage
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| A combination of a Corporation and a
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| | cannot be deducted. To deduct a part of
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| Partnership is the Limited Liability
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| | your home, it mustmeet one of the
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| Company (LLC). The advantage is that the
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| | following criteria:
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| profits and losses are passed to the
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| | 1.Your principal place of business
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| owners without taxing the business
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| | 2.You meet or deal with customers or
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| itself, and the owners are not personally
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| | clients in this area as a normal part of
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| liable. However, there is no stock, fewer
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| | your business.
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| incentives, and loads of paperwork.
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| | 3.An unattached, separate structure used
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| As you can see, there are pros and cons
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| | in connection with your business.
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| to each business structure. It is highly
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| | There are also a few other small
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| recommended that you talk to a local
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| | requirements. The only exceptions are for
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| accountant or lawyer as to which
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| | day-care providers and the storage of
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| structure best fits your needs.
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| | inventory or product samples used in your
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| What other forms and taxes do I need to
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| | business. If you buy a computer and over
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| worry about?
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| | 50% of its use is for the business, you
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| Business License
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| | can deduct the depreciation on the
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| There are many types of licenses, and
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| | portion of your computer used for
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| even for an online business you will
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| | business as a miscellaneous itemized
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| probably need one to operate legally. If
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| | deduction. Expenses such as web hosting,
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| the business is located within the city
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| | domain registration, etc, can all be
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| limits, then your license comes from the
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| | deducted as business expenses.
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| city. If you are outside the city limits,
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