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Why start my own bussiness?

Discussion in 'Studio Lounge' started by anonymous, Apr 20, 2005.

  1. anonymous

    anonymous Guests

    I wanted to know when you guys think I should file for a business license? I have been investing in this studio for over 3 years now. I have enough recording gear to get out there and start recording bands, but I have stayed away from the whole "business aspect" because I didn't want to have to learn about taxes and such just quite yet.
    However I am close enough along that I could at least start printing up business cards, and this is the reason for the question above.
  2. maintiger

    maintiger Well-Known Member

    If you do mobile recording you might not need a licence as you do not have a fixed location- if you do have fixed location you will need a license and also a resale number (for sales tax) If you do go for a legitimate business enterprise make sure you keep all the receipts for all the gear you have bought. I did get audited one time by the IRS when I had my studio and they wanted to see receipts for all my equipment...

    another thing to consider is that if you declare a loss like 3 years in a row, IRS might decide that your business is a 'hobby' and they can negate all you deductions, thus leaving you with a big tax bill. the best thing to do if you do decide to go 'legit' is to at least pay for an experience business tax accountant to do your income taxes. that definitely saved my ass when I got audited and believe me, when you are in that position, its worth every penny.
  3. anonymous

    anonymous Guests

    Yeah, I'm definitly mobile at this point. So that sounds good maintiger. Thanks for the great reply
  4. gdoubleyou

    gdoubleyou Well-Known Member

    Get a license, it's a great tax writeoff when you buy new gear.

    And since you are mobile, keep a detailed log of your milage, and maitainance costs.

    This is my year to make a profit.

  5. realtwang

    realtwang Guest

    Side question

    So, I'm confused...sales tax should be charged on services (recording) and not just on goods sold (like 1000 printed CD's)?
  6. o2x

    o2x Active Member

    Just to be boring, but make sure you get yourself public liability insurance. It won't cost you too much and could save you from a hefty law suit if thinks go wrong.

    If your mobile, a lot of places wont hire you unless you covered anyway.
  7. Thomas W. Bethel

    Thomas W. Bethel Well-Known Member

    Re: Side question

    It depends on your state and local tax codes. Best to find out now or you may owe lots of money at some point and they may charge you for the taxes as well as a penalty for not paying them back when. Most cities and states have the laws on line or you could ask an accountant who deals with businesses.

    Taxes are NOT something to second guess.

  8. MXStudios

    MXStudios Guest

    You want to set up a business to keep your finances divided from your personal life. I would suggest you set up an LLC or an s-corp which will remove you from any personal liability or obligations related to the business.

    Go to http://www.corporate.com and look at some of the info there. you want to make a living in your studio, set up a legitimate company and treat it as business.

    In either case, any equipment you purchase to be used in your studio is tax-deductible on your INCOME taxes. Also, expenses such as advertising, phone, a portion of your mortgage or rent, etc...

    Keep it apart from your personal life to keep it clean.

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