Can I start a home based business, not get a business license and not pay taxes?
shimshim asked:
I read that if you dont get a business license and you run an at home based business and your neighbors dont complain about your work, its unlikey the IRS will find out and make you pay a fee as well as put your business on hold until its done. Now, in the state of FL, if I chose to not get a license because the type of business (event planning) did not require one, would I still have to pay taxes?
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I read that if you dont get a business license and you run an at home based business and your neighbors dont complain about your work, its unlikey the IRS will find out and make you pay a fee as well as put your business on hold until its done. Now, in the state of FL, if I chose to not get a license because the type of business (event planning) did not require one, would I still have to pay taxes?
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Tags: Business Event, Business Planning, Start Business
Make note of where you read that. And do NOT read that garbage any more if you value your financial well being!
Of course you have to pay taxes! And what gives you the idea that the IRS won’t know about it? Eventually you’ll have a business customer who will hand you a Form W-9 and ask for your taxpayer ID number before they pay you. Assuming that they pay you more than $600 (and possibly if it’s less) the IRS will be notified of the payment.
Or someone will get audited and will have claimed an expense deduction for the money that they paid you. The IRS auditor will then gather the details about YOU and make a note to follow the money trail and see if YOU are paying YOUR share.
Either way, you’re BUSTED!
But let’s just say that you manage to fly under the radar for 40 years and get away with it. You retire and apply for Social Security. Guess what! You haven’t paid in a dime in those 40 years so you get goose egg! Nothing! Nada! Zip! Opte! De rien! Null! But hey, I hear that Alpo isn’t all THAT bad!
The issue of a business license is strictly a local one. Maybe you need one and maybe you don’t. But you better plan on keeping proper records and paying your taxes or life WILL become truly miserable for you. Sooner or later. (And sooner is better, since you’ll at least have a shot of paying up.)
If you have income, you will have a filing requirement as soon as your gross earnings from self-employment are $400 or more. The IRS functions on a you-know-you-had-it, so you-need-to-report-it. And the IRS will know–at least one of your events will generate a check for more than $600 and the payer will issue you a 1099-Misc. Fail to report the income and the audit gets very interesting….
The IRS doesn’t care if the neighbors know, though they will share data with the state. (California routinely sends business license letters to anyone who filed a schedule C.)
I would ask the city where you would get a license. Most of the time if you make more than $400-$600 you will be required to report your income. If you make money that no one knows about or is held accountable for paying you a paycheck, it becomes your responsibility to report your income.