Taxes and a new, small business

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
TresBelle65
Posts: 147
Joined: Sun Apr 12, 2015 2:44 pm

Taxes and a new, small business

Post by TresBelle65 » Fri Apr 20, 2018 2:13 am

I'm transitioning to retirement from a long time career. I've started a new, very small part-time side business as something I would like to grow and eventually keep me busy at a minimal level, once retired. I am paid as a 1099 independent contractor by the companies that hire me.

I am just getting started and incurring much higher costs than income, on a ratio basis. Eventually, if all goes right, it will turn profitable. It is very common for new people in this industry to experience a few early years of low income while they build their network of contacts and get an established track record in order to become more marketable.

I have read that for tax purposes, it's important to distinguish this from a hobby.

I've registered with my local county as a sole proprietor. I've opened a separate checking account. I am maintaining a ledger of expenses and income.
I am planning to attend a semi-annual conference for this industry later this year in Las Vegas. It is common in this industry for people to start part time and only go full time after retiring or losing their regular employment.

There do not seem to be any tax specialists devoted to this niche sector - only small business tax specialists in general as I've been able to find so far.

It heavily relies on the use of technology and one's automobile.

Any advice or tips from someone who has been in a similar situation would be appreciated. I want to set this up and do it right in order to avoid any headaches.

Thanks!

ChinchillaWhiplash
Posts: 523
Joined: Sat Jan 20, 2018 5:40 pm
Location: Colorado

Re: Taxes and a new, small business

Post by ChinchillaWhiplash » Thu Apr 26, 2018 4:04 pm

I would consult with a good CPA to make sure everything is set up correctly. They should also be able to keep everything structured for the best tax situation for you. You can probably do this with a meeting or 2 and file taxes on your own unless you have a complex business structure like a S corp.

Post Reply