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Tax Basics for Small Business Owners

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Taxes

Disclaimer: Start Up Heart Up, LLC is not a law firm or a substitute for an attorney. We cannot provide any kind of advice, opinion, or recommendation about possible legal rights, remedies, defenses, selection of forms, or strategies. This publication is designed for general information purposes and does not constitute legal advice. See your attorney about your specific situation.

The tax roadmap for typical early stage small business owners:

  1. Keep track of all expenses of the business.

  2. Register your business with the State you live in / operate the business in. (Read more about choosing biz structure HERE.

  3. Obtain your State Sales & Use Tax ID (if applicable).

  4. Keep track of all income of the business.

  5. File Federal & State Taxes.

TAXING OF SOLE PROPRIETORSHIPS & LLC’S:

The profits and losses resulting from your small business (SP or single member LLC) will generally “pass through” to your personal tax return. In this case you will file your personal tax return and address the business’ finances on Schedule C / Form 1040.

Read more & download the specific forms on the IRS website: HERE.

EVERYTHING YOU NEED TO KNOW ABOUT COLLECTING & FILING STATE TAXES:

This State-by-State landing page from TaxJar organizes & spells out the requirements for each State's sales tax requirements, including for example:

(1) Do you or don’t you need to collect Georgia sales tax?
(2) Which customers do you collect from?
(3) How much do you collect?
(4) What do you do with all the sales tax you’ve collected?

(& much more!): https://www.taxjar.com/states/

Marketplace Facilitator States

Generally speaking, a marketplace facilitator is a person or company that contracts with a seller to facilitate a taxable retail sale by processing the payment and providing a service to facilitate the retail sale.

Examples include:

  1. Online Marketplaces like: Etsy, Amazon, etc.

  2. Print on Demand sites like: Redbubble, Printful, or Society6

  3. Sites that are NOT considered marketplace facilitators are Shopify / your own domain.

Every state is different, however your state’s department of taxation or revenue should have a landing page on this. For example, in Georgia: https://dor.georgia.gov/marketplace-facilitators

QUESTIONS?

Email hello!@startupheartup.com with your tax or other legal questions. I am constantly building out this page with resources to make the process simpler for small biz owners. Your questions are valid and valuable to the Start Up Heart Up community!