Multiple Income Streams and business questions...

[mjr]

Alright, here we go...

As many of you know, I've been considering starting a "side" business. It would likely be a "technical solutions and services" business.

That said, I'm also looking into other income streams and trying to figure out how I should move forward with them, regardless of what they are.

I'm considering starting an LLC (which is around $300 where I live) for the "technical" business.

But I don't want my LLC to be too general from a naming perspective. Especially when it comes to the services offered, and on the website I would build. I want it to basically be "here are the tech solutions and services I offer...", and not, "but I also do A, B, C, and D".

At the same time, the other income streams may not be related to the LLC, nor related to each other.

So I was thinking of doing those things as a DBA (aka "Doing Business As" or "Trade Name").

I don't know what that would mean for tax purposes, though. I like to try to keep my taxes easy and straightforward, especially since my wife does them.

Also, at some point, I wouldn't mind selling these businesses, or just working on them full-time (depending on income).

Thoughts?

[taxguykarl]

Here's an article on business structures.
In a nutshell, LLC's have liability protection. A simple DBA and a creditor or litigator can seize all but the clothes on your back...also a corporation has clearer ownership and what assets are personal and what are business.

LLC's and single-shareholder Subchapter S corporations (the later formed from an already-existing corporation by submitting Form 2553--instructions) use Schedule C (instructions) to report earnings which are carried to Form 1040, line 12.
This generates a self-employment tax (i.e. the social security and medicare taxes you would pay if you worked for someone else) in addition to the income tax (assuming you make a profit). This is calculated on Schedule SE (instructions).
More tax details.

Also don't forget your state (county and city in some cases). Where are you, BTW?
Yes, you are welcome to PM me with more detailed questions or information you don't want public.

[Chanlin]

I'm not a business person, so take this for what you will.

I've always read/heard/been told that when starting your own business you should expect that every last dime made within at least the first two years should be invested in growing the business: ie. spend it on advertising and any other business expenses before you start taking it as profit/income. Not sure how much that translates into a personally run business like the one you propose.

I did used to work for the owner of a local pizza joint that started with one place and has since sold it as a multi-store franchise. He always spoke how his first 5 years were really touch and go and he almost went completely bankrupt the after the second year. Again, different experience, but just be prepared for the massive amount of work it is.

That said, I think it would be wonderfully freeing to be your own boss.

Also: https://www.sba.gov/blogs/6-things-y...sibilities-llc

[taxguykarl]

I've always read/heard/been told that when starting your own business you should expect that every last dime made within at least the first two years should be invested in growing the business: ie. spend it on advertising and any other business expenses before you start taking it as profit/income.

I've never seen a first-year business (except for spare-room daycare operations) make money. The negative income can mean less taxes overall.

[mjr]

Here's an article on business structures.
In a nutshell, LLC's have liability protection. A simple DBA and a creditor or litigator can seize all but the clothes on your back...also a corporation has clearer ownership and what assets are personal and what are business.

LLC's and single-shareholder Subchapter S corporations (the later formed from an already-existing corporation by submitting Form 2553--instructions) use Schedule C (instructions) to report earnings which are carried to Form 1040, line 12.
This generates a self-employment tax (i.e. the social security and medicare taxes you would pay if you worked for someone else) in addition to the income tax (assuming you make a profit). This is calculated on Schedule SE (instructions).
More tax details.

Also don't forget your state (county and city in some cases). Where are you, BTW?
Yes, you are welcome to PM me with more detailed questions or information you don't want public.

I'm in Texas.

I guess right now I'm more concerned with business structures rather than taxes, but your tax info is helpful, as always.

I mean, the big thing is I would hate to have to set up an LLC for every single type of "venture" I try.

Of course, I could always just set up a "generic" one, and then one for my "technical services" work. But I also read somewhere that I could take my DBAs and somehow associate them with an LLC.

As an example, say I want to start four unrelated things that could potentially bring in income. I wouldn't want to set up four separate LLCs, because they would all be unrelated.

I do know at one point I did a small $700 "side project" (not as a DBA), and had to do a quarterly payment. I think overall it was something like 40% I paid in taxes. I had a full-time job at the time, so I was taxed at that rate, and I had to pay FICA and SS taxes on that $700.