How do I handle my taxes if I have my own business?

This post is in response to a request to talk about handling taxes when you have your own business.

People from over 104 countries read the Subconcious Tonic blog. I can't answer this in one way to apply to all people. But regardless of where you are, and as I've mentioned before, if you're doing business, do it legitimately. In the United States, that means, get a Tax ID.

A Tax ID allows you, as a service/product provider to sell goods or services legally. You can get a Tax ID from your local state comptroller's office. But you must register a business name in the Assumed Name office first. They are also a great resource to answer any other tax related questions.

TO CHARGE OR NOT TO CHARGE TAXES
Once you have your Tax ID, you are then able to use other vendors, such as printers, tax free! You're allowed to do this because you're going to turn around and sell that item to your client, and by law, you're supposed to charge sales tax.

For example. I am going to order 3000 brochures for a client. I've selected a printer, and once they are complete, I will pay for them. But if I show the printer I have a Tax ID, they will not charge me tax.

The idea is not to pay tax twice.

The sales tax you charge your customer will have to be paid to the state comptroller at the end of each fiscal year. Depending on how much money you make, you may have to pay taxes quarterly.

DO I HAVE TO PAY MORE TAXES DURING INCOME TAX TIME?
Yes. Because the money you are receiving is considered an additional source of income. So you are required, by law, to report any income and pay taxes on them.

WHAT ELSE IS A TAX ID USED FOR?
You're only allowed to use it when you're buying products that you will resell to a customer. I just made 15 hats for a client that had custom embroidery. I could buy those hats tax free from one vendor, and the vendor who did the embroidery could do it tax free as well. Get it?

Please post any questions you may have about your business below. Good luck! -Kelada