# Need help starting a business...



## user139581 (Apr 22, 2011)

I want to start a online clothing business next month, and I need HELP with information on how to get it started.

I contacted Legal Zoom and asked them what would I need to start a business, and they told me I would need the following.

1) A DBA Doing Business As.
2) A Business License.
3) A Sellers Permit.
4) A Federal Tax Identification Number just in case a wholesaler ask for it.

Now I live in New York City, and I will be buying wholesale t-shirts and heat applying designs on them and selling them for retail. I will only be selling online from a website, and I will be working alone.

Also if anyone can let me know when do I need to collect tax and do I have to pay federal tax or New York City tax, or is it just my state I have to pay tax to?

I would like to know from you the experts if this is right or if I need anything else to get my business started.

THANKS


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## nperoni (Aug 12, 2010)

hey brien-

first thing, you should check out incfile.com. they're quicker, include more in their package, and are cheaper than legalzoom. next, you can start selling shirts without any type of legal business entity, you'll just have to operate all finances out of your personal bank account, which would affect your taxes of course. "Doing business as" is something you get through a bank so that you can cash checks or accept payment for a company without actually having a legal entity. if you create a legal entity, such as a llc or sole proprietorship, you don't need a "doing business as" because you will actually have a business. you'd just have to make sure you open up an account for that business, which requires the next step: a federal tax id number. now you mentioned 3 things: a business license, a seller's permit, and an employer identification number (EIN) or federal tax id. these are all essentially the same thing. if you get an EIN, then that covers the other two and that's all you need. if you're serious about starting a business and want to create a legitimate company that you plan on growing, i'd say spend the 500 to get set up with an EIN and state business license. there are plenty of sites that will take care of it all for you (i think incfile.com is the best) specific to your state, and then you won't have to worry about changing things down the line.
as far as taxes go, you'll have to check out the state law. just google it and read up. here in pa there's no tax on clothing, but it varies from state to state. 
honestly, one of the best routes is to just google any questions you have. the info is probably already out there and it'll help you set yourself up the right way. 
good luck!


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## ishredbanez (May 14, 2011)

So the 500 he would have is for wanting to hire employees and such: What about for me doing just a friend and myself for now?

Also, do you mean you don't have to pay taxes for selling clothes, even though you are making more money (for income taxes)? What about selling to other states/countries even?
How do ya know how much to tax/pay?
If you wait until your business picks up before becoming a LLC or what have you, do you retroactively pay into it probably with everything tracked in the past?
What about from a couple years ago when a friend and I made a run of tees? Include that?

This is something that would take full attention it seems 
I mean I guess you could do it as a hobby but hmm... Seems like if you have a lot of stuff going on, then is it something to even consider doing?
Sorry for jumping on the thread, but hopefully we all can benefit from it.


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## nperoni (Aug 12, 2010)

austin - the 500 that incfile charges is based on a package i purchased to register as a LLC in pennsylvania. it's also the platinum package, which includes expedited processing and complete form preparation, so i didn't have to worry about anything. there are cheaper packages available, based on how much of the work you want done for you and how quickly you want it done. also, if you were looking to form the business as something different than a LLC, the price would adjust a little as well. an EIN doesn't mean you have to hire employees or pay yourself as an employee. an EIN is for tax purposes, basically a number assigned to your business so that the federal government can recognize you. any legitimate legal entity will have an EIN, whether sole proprietorship (in which case your EIN would probably just be your social), LLC, S-corp or C-corp. but you don't need one to start selling merchandise, because the government can also use your social security as your EIN if you don't have a real business.
i can't speak on taxes when selling to other countries because i'm not there yet and so i haven't looked into it, but as far as selling in different states goes, it works like this: for a physical presence, you charge whatever the sales tax is for that state. for an online presence, you only have to charge a sales tax to the customer if you have a physical presence in the same state they purchase from (the sales tax would be determined by the customer's address). however, some states are now trying to push legislation to charge online sales tax so i'd check with your state department of revenue. pennsylvania's easy, like i said, because there's no sales tax on shirts. 
that's not to be confused with income tax though, which is charged based on the amount of profit your business brings in, what form of business you own, and how you file with the IRS. you will know how much tax your paying at the end of the year when you go to file. whether you have a business or your just doing business as, i'd consider hiring someone to file for you. that's what i'll be doing. it just makes every thing a lot easier. just always save receipts and track all your income and you'll be alright.
if you're just doing it now on the side and later you form a business, none of that will matter because those shirts weren't sold as part of the business. there would not be any retro-active charge or fees to pay for shirts sold before you owned a business. 
the financial end of a business definitely takes full attention. that's why they have degrees and professions based specifically for accounting and taxing purposes. but the internet is a wealth of information and everything you need is at the access of your fingers, so with enough reading anybody can figure out enough to get started.


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## ishredbanez (May 14, 2011)

Wow dag thank you.

Its just like, how do I know how much tax or whatever there would be? Its not as simple as when I go buy a cheeseburger from McDonalds for 99 cents, I pay 6 cents extra per dollar spent to total $1.06.

And if caught/audited somehow or something with selling merch without a business license or something, how much trouble can you get in? Or is it usually like "okay if you wanna continue get this license and we will let it be".
Or is it always not like that? Is there no quarterly tax thing? I do know that annually means you still pay into the taxes even if you are only around for say 6 months  of course.

I mean I guess music is my true passion though, and I wouldn't wanna really give that up. However, I don't wanna live a touring lifestyle if I'd ever do that one day. It'd be fun for awhile, but I like to stay in the home area mostly.


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## Eview1 (Apr 29, 2010)

Austin 

Start at your *local Library*, they have a business section and prob have business seminars for someone who is new and wants to start a business (mine does every couple months for free) after you read a few books you will see the what and where of it all. You do not need to pay someone, you can do it your self in the beginning for Federal tax ID. They will have online business videos and info for free too, they'll help you to do the forms and send you to where to look for more info.

Good Luck, let us know how you are doing


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## ishredbanez (May 14, 2011)

ah thank ya, I was going to say it would be kind of pricy to pay someone to do them, even if they are simple...?

But is this something I should pursue as a passion, even though music has that spot right now? Or can I make it hobby-style, or... Not room for both?


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