I was going through old emails and came across this one from my accountant. It has valuable information that I thought would be good to share.
LLC or Other Form of Entity:
I would definitely consider forming an LLC. You could contact an attorney if you wish but many people having been setting them up on their own using the following web-site http://www.wdfi.org/corporations/forms/corp183forms.htm . It does cost a few bucks so you need to evaluate whether the cost is worth the liability protection depending on how many sales you will have.
If this thing really takes off and you want to (you would not have to) change to a corporate form of business in a few years, it is very easy to do with an LLC. Also, an LLC would not complicate your tax situation. LLCâ€™s with single owners are considered â€œdisregarded entitiesâ€, a technical firm that means that the IRS treats you as if the LLC didnâ€™t exist.
Income Taxes (Yuck):
As to deducting expenses – keep track of what youâ€™re spending. You would definitely want to offset your sales with expenses as much as possible. If the expenses exceed sales result in a loss, we can make a call on whether it makes sense to deduct the loss.
Sales Taxes (Mega Yuck):
Don’t forget about the state sales tax permit for in-state sales. You can apply for the Wisconsin one at http://www.revenue.wi.gov/faqs/pcs/seller.html.