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Old 10-25-2008, 02:27 PM #1
anbukiller
 
 
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Join Date: Nov 2006
Location: Ithaca, NY
Question about taxes

A friend and I are looking to start up an internet business, in which the only revenue we'd generate is from sponsors. I've contacted the sponsors and they say that they don't deduct taxes from paychecks, and we'd have to deal with that on our own. Also, my friend and I are going to register this as a business w/ the IRS and get a "Tax ID". So, I'm not exactly sure how taxes work. Do we have to file taxes from our business? Which forms would we fill out and how often? Can anyone just point me in the right direction with this? I've checked google and the IRS site, but I'm still a little confused as to what we're required to do.
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Old 10-25-2008, 05:06 PM #2
Bush'em
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Unless you form a corporation, your business income flows through onto your personal taxes. Of course your business expenses flow through too. As far as what forms your business would have to fill out, I'm not sure. Maybe run a few searches on tax issues for sole proprietorship and partnerships. As soon as practical and if you're serious about it you should form into a LLC.
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Old 10-26-2008, 03:45 AM #3
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Ughhhh, I had a long response all written up, but I accidentally hit the back button on my computer. Basically if you are going to go with a partnership you need a Form 1065 and a Schedule K-1 to allocate income to each partner. Then on your 1040's you need to declare the income. You might need to file a 1040-ES (for estimated payments) depending on how much you are going to be making.

I would not incorporate if I were you (initially), unless it is an S-Corp, as you will be double taxed and have to pay incorporation fees for a company that might not last. Your best bet in the short term is probably a simple partnership, and once you see the business working you should get the paperwork done for an LLC or LLP. Good luck.
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