The short answer: you need one bank account per person, and then one personal account.
The question really should be “Do you have 5 businesses, or do you have 1 business with 5 marketing channels?”
If it’s the latter of the two, then what you really need is one business account, 5 DBAs, and a good bookkeeping system to track income from each.
For more info on DBAs, check out this bitchin blog.
Then, make sure to checkout the free download How to Be Your Own Tax Pro & the Profit First Roadmap.
Hello and welcome to episode four of the unfuck your business podcast. My name is Braden and I am your host. Thanks so much for listening to this episode. Again, this is one of our short Tuesday episodes, so we're going to tackle one of the questions that came from our Facebook group. If you're not...
Check out the episode and the show notes.
Hello and welcome to episode three of the unfuck your biz podcast. I'm your host, Brayden, and today I am with my good friend Amanda. Hi Amanda. Hi. How's it going? Thank you for having me. Yeah, super excited to hopefully the audio is good for all of you. Amanda just went and got her snowball microphone. So we are all set up and profesh and this shit. I invested, I invested for Brayden and I love it. Make sure that you save that receipt for your tax deductions. Okay. Thank you for reminding me. You're welcome. All right, so the idea of this podcast episode is, well, this podcast episode series I should say is pretty straight forward. Amanda is another fellow small business attorney in Dallas, Texas. So we do a lot of the same types of things or the same types of clients....
The short answer: It’s never a bad idea to form an LLC. It provides great legal protection.
When to form it really depends on your personal financial situation. Now is great, but weigh the risks in your biz.
To get started, listen to the podcast episode. If you’d like more info from there, check out this blog.
Then, download the Small Biz Blueprint to take the LLC Risk Assessment.
Hello and welcome to episode two of the unfuck your business podcast. My name is Braden and I am your host. Thanks so much for tuning in. This is going to be a very short episode. I noted in the welcome episode of the podcast that every other episode that we do will be a quick bite size tip episode. So I'm trying to come up with a better, more clever name for what to call these. You can let me know if you have...
On this episode, I share a bit of info about what the UFYB podcast is all about, and how I hope to help you become a more tax and legal savvy entrepreneur.
Why the New Podcast
I began my podcasting journey with the Creativepreneur Podcast, which you can still find on your podcast app under Get Your Shit Legit with Braden.
Long story short, I did a rebrand that was a disaster, that led to another last minute rebrand, and the podcast just kind of became a mess.
I also realized that while I had some amazing guests on the show, they weren’t very in line with my business, which is all about helping creatives get the legal and tax bits and pieces of their businesses up to speed.
Thus, I decided to make this pivot. My goal is to truly help you kick some ass in your business by bringing some fun and clarity to some often confusing, dark, and scary topics.
I’m super pumped to begin this journey with you. Throughout the episodes, we will explore the Unf*ck Your Biz Framework, a...
Many new business owners wish to launch their businesses in the new year. However, the legalities needed to get started can complicate the process. When forming an LLC in California, you must pay an annual minimum franchise tax to the state on an annual basis. That minimum tax is $800 in addition to standard income taxes. The first franchise tax is due on the 15th day of the fourth month after the LLC formation. For example, if you were to form your LLC in July, the fourth month of operation would by November. The $800 franchise tax would be due on November 15th.
This is why I talk to many clients who simply wish to open their LLC in the new year. Obviously this is a business decision. If you have people waiting for you to launch your biz, then you probably wouldn’t delay. Get that money, money, money.
The good news is that California offers some carve outs to those who file at the end of the year. If you form your LLC on, or after, December 17th, you are not required to pay...
The birth of a new business is an exciting time. There’s no shortage of motivation, or enthusiasm and your creative juices must be flowing. Everything you’ve worked towards for the past few months has culminated into this moment... so congrats! But the legal aspect is often overlooked or worse, completely ignored. You may need a business agreement like an operating or partnership agreement. These concepts new to you? No worries! Keep reading to figure out what kind of agreement suits you best.
Partnership Agreement Basics
If you have two or more individuals coming together to form a partnership, you will need a Partnership Agreement. Since a general partnership doesn’t have a separate existence in the eyes of the law – the partners will be jointly and severally liable for any debts of liabilities of the business. Also, in California, and in many other states, state default rules apply in absence of a partnership agreement. In short, if you don’t have an...
I frequently hear people say things like “I just do this as a hobby,” or “I was told that if I make less than x dollars this is just a hobby.”
“Hobby” has a different meaning in a tax context, a legal context, and in a non-tax/legal context. We all understand the colloquial and dictionary definition of a hobby, so we will skip that bit. You’re here for the fun part anyhow right? Taxes and law!
Let’s start with the “why.” Why does it matter if we call your endeavor a hobby or a business? Answer. They are taxed differently. Also, hobbies may require less business structure.
HOW IS A HOBBY TAXED DIFFERENTLY THAN A BUSINESS?
Business income is subject to both income tax and FICA taxes. FICA is the tax for Medicare and social security. Collectively, I call these self-employment taxes. Federal income taxes range from 10% to 37% based on all income. Self-employment tax is a 15.3% tax on self-employment income.
What's an EIN?
EIN stands for Employer Identification Number. It's essentially your business's social security number. You use it to identify the business.
When Must You Have an EIN
According to the IRS website, you need to have an EIN if you operate as a corporation or if you have employees.
When Should You Have an EIN
I say always. Getting your EIN is super easy. It takes about 5-10 minutes, and it's free. You will need an EIN to open your bank account, and as a sole proprietor or single member LLC owner, you can use your EIN in place of your social security for important documents like W-9s. That means, in short, that you don't need to give your social to strangers.
What Not to Do
Don't pay someone to get your EIN for you unless it's bundled into a full service package. It's super easy. Just Google IRS EIN application and do it for free through their site.
EINs are just one of many applications you need to complete to get your business legit. For a more...
According to the IRS you must file a 1099-MISC “for each person in the course of your business to whom you have paid during the year . . . at least $600 in . . .services performed by someone who is not your employee.” This does not apply to employees.
There is also an exception for payments made to s or c corporations and LLCs that have elected to be taxed as s corporations. Naturally, there are exceptions to this exception. Lawyers must get a 1099 even if they have corporations. There are a couple of other very rare exceptions, which you can find here.
You are also not required to issue a 1099 if you paid the service provider by credit card, paypal, or other “third-party network providers.” Note that credit cards do not mean debit cards. Payments made by debit card are not exempt from 1099 rules as the payment comes straight from your bank and not through a third party.
Wondering why credit card payments are...
You need a contract. I need a contract. We all need a contract. I won’t dwell on that bit. Here’s what I want you to know about a contract. While a contract is a legal document, it need not have legalese. A good contract is a simple contract.
If both parties to a contract don’t understand the terms then it’s a shitty contract. It doesn’t help clearly communicate your rolls. It might still help you in a lawsuit, but it won’t help prevent problems.
Contracts need to be specific and clear. Do me a favor. Have a friend read through your contract. Buy them lunch. Then grill them with questions. When would you pay me a client. What happens if you pay late, or I cancel, or your drunk uncle grabs my butt while I’m in the middle of photographing your wedding?
If you your friend can’t answer those questions. It’s time for a redraft..Ok, we got the intro out of the way. Let’s talk...