Checklists for starting your first business has generated some follow up questions and discussion, so let’s go over those.
Partially, but you won’t get much of a deduction. Here’s Maesz’ explanation:
The previously personal items of equipment that are converted to business use can be depreciated from the date of conversion. The basis for depreciation is the dreaded Fair Market Value of the item on the date of conversion. Then, the business percentage is applied to the FMV and depreciation (on computers 3 years) commences. However, there is no Section 179 available for converted property.
FMV of used software would probably render too small a value to gain much in the way of depreciation, but the process would be similar. Once, again, no Section 179 for converted property.
Can you tell she’s an Enrolled Agent? Yeah, I thought so. The short answer is, probably not worth the effort.
How do you distinguish that you are self employed if you don’t have a license or something? Can I just say I’m a blogger and is that enough?
As far as the IRS is concerned, if you decide you are in business, then you are in business. For a sole proprietorship, you report it to the IRS only at the end of the tax year. The IRS has no requirement to have filed or registered the business locally. You do have to operate your business with an intent to make a profit. So as a blogger you would also need to accept advertising or sell written works for pay, for example. (We can get Maesz to talk more about that, if you want.)
In Oklahoma, there is no state-wide requirement for licensing or registration of most consulting and independent self-employed people. That leaves it up to the cities, and most small towns here don’t require it.
If anyone is not sure about your own local rules, I would check in with a Small Business Development Center.
Alternatives to using a lawyer to review contracts.
Jeff pointed out that contract negotiators specialize only in contracts, and can provide quick service.
Someone said you should never form a sole proprietorship.
I’ve operated both sole proprietorships and an LLC. There are advantages to each. For a really small business, such as a one person part time operation, I generally recommend a sole proprietorship for the ease of starting and maintaining it. LLC’s are also easy to start, but vary significantly from state to state.
For more on other business structures, check out When NOT to be a sole proprietorship.
What other follow up articles would you like to see?
- In an economic crisis, spend your brainpower before your dollars - November 25, 2020
- Video: How to fill empty car dealership buildings for the holidays - November 6, 2020
- How has 2020 changed the challenges rural small towns face? Tell us here - October 20, 2020
- The Idea Friendly Method to surviving a business crisis - October 6, 2020
- Join me for the Rural Renewal Symposium online Oct 13 - September 26, 2020
- Cheap placemaking idea: instant murals - September 11, 2020
- Refilling the rural business pipeline - July 7, 2020
- Huge vacant buildings: grants to renovate? - June 9, 2020
- Economic self defense for small towns - June 7, 2020
- The best things you can do for local businesses in light of coronavirus - March 27, 2020