154 - Answering your DBA and Business Auditing Questions
On this episode of the podcast I discuss DBAs, tax filing, and how to audit your business
This episode is brought to you by my FREE Tax Challenge. Taxes suck but we all have to file them. I'll walk you through the 5 steps you need to get your tax documents organized and ready to file. Sign up for this free challenge.
Here are this week's questions:
1. I am a solopreneur of a small health and wellness business and am planning to get married this year. What is the most tax advantageous way for myself and future spouse to file our taxes? Separately? Jointly? - submitted by Christiana
Generally speaking, the best way when you are married is to file - married, filing joint because you get a bit of a better tax rate. A few times you might not want to file jointly is if one person has a lot of student loans or medical bills so it's best to look into that. Note that if you are not filing quarterly taxes for your business, it can eat into your spouse's refund. I share a lot of examples of how to file taxes with a significant other in my book Unf*ck Your Biz.
2. I have a 2013 C Corp that I already filed S Corp election for years ago in Florida. I have a bunch of DBAs for brands that cover different aspects of the fitness industry:
In person physical and nutritional fitness training in Tampa, FL
Online physical and nutritional fitness training all over the US
Online social fitness (social media marketing, brand dev, web design and mgt, corporate filing and virtual office services affiliate)
Online spiritual fitness coaching (this one is a free service; not paid but I still gather data)
Online mental fitness coaching/motivation (not a doctor, it’s just mindset motivation stuff with referrals to a doctor if needed)
Financial fitness (network marketing opportunities, affiliate marketing opportunities, crypto and online trading opportunities and mentorship)
I will be licensing out my physical and nutritional fitness coaching program under its own brand to myself (the trainer brand I listed first) as well as other certified fitness trainers who want to teach it. The brand itself is a product obviously.
I have an online academy/school that will be setup to teach the two programs I just told you I will be licensing out to trainers. That school is it’s own brand and I’ll add additional courses later.
Is my setup what you would recommend? One big giant corporation with all of the intertwined brands setup as DBAs of the Corp? - submitted by T. Marcia
This can be a Catch 22. One one hand, especially as an S Corp, it can make sense to have everything under one, especially as an S Corp because you're going to pay yourself a salary as the owner and then you will pay tax on the profit and an accountant can help with advanced tax strategies. On the other hand, from a liability purposes it's best to keep things as separate as possible. It can help to put your businesses in different arenas, all health and fitness in one business and then all the other things in another business to make financial modeling easier.
What accounting software would you recommend for a multi-entity corporation like mine?
Quickbooks is usually go to. With all of your businesses, it would be worth it to invest in a bookkeeper.
A lot of the startups that I manage (their brand dev and social media, etc) are similar: They are holding company LLCs or C corps that are owned by one single person who want to elect S Corp status and create a bunch of DBAs underneath to house their different brands that usually are somewhat related to each other...
I have a client who has an LLC with a nutrition brand, a physical fitness brand, and a juice business as DBAs.
That's fine, same would apply in that there are benefits and drawbacks.
I have a client who has a C Corp who wants to be an S Corp who has an art brand, a fitness brand, and an event planning company as DBAs.
These are very different and should probably be separated.
When I say different businesses I mean a corporation is a business and I look at DBAs as different income streams.
Audit your business for free at www.bradendrake.com/audit