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Husband / Wife, Joint Venture?

Hello please bear with me I'm trying to wrap my head around this whole starting a business thing. My wife and I want to start up a small business. We've already gone out and got a DBA now I'm wondering what I need to do next.

  1. I was reading since my wife and I will be the only employees we can be considered a join venture per a new law passed in 2007. Is this true?
  2. Do we need to get a new Tax Id for this business?
  3. Is it best to have a seperate bank account?

Any other resources I can be pointed to would also help greatly. If any of these questions should be posted elsewhere please let me know Thanks!

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Reply to
larry.ruckman
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So far, so good.

That seems unlikely. Assuming you file your personal taxes jointly, you would normally treat a business like this as a sole proprietorship and pay the taxes on Schedule C of your personal return.

Yes. Visit

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click the link "Online EIN Application" and you can get one in about a minute. The only reason not to get a new EIN is if the two of you already have an EIN for a previous business in which case you'd use that EIN.

Yes, it's a big help to keep the records straight. Also, your bank is unlikely to allow you to deposit a check made out to the DBA into your personal account, nor to let you get a credit card merchant account without a business account to link it to. (Been there.) Regards, John Levine, snipped-for-privacy@iecc.com, Primary Perpetrator of "The Internet for Dummies", Information Superhighwayman wanna-be,

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ex-Mayor"More Wiener schnitzel, please", said Tom, revealingly.

Reply to
John L

The first thing you should do is find a local CPA/tax advisor to help you with your planning & tax preparation issues. Per the 2007 tax law, a husband & wife in a business together may be able to file a sch c instead of a partnership tax return for their business. There may be issues to deal with if your business is an LLC. Exactly how some states are going to treat it is still being figured out. You will likely need a EIN for your business. You may have to register in some form or fashion with your state as well. Having a separate bank account for business use is normally a good idea. ___________________________________

-----> real address on hobokeni or hobokenx

Reply to
Benjamin Yazersky CPA

wrote

You are not an employee of your business venture. Understand what that means.

Yes, in that regard you don't have to file a partnership return, but you each file a Schedule C reporting yoru share of the business revenues and expenses. This isn't always easy, to consult a CPA or EA in yoru area.

The Schedule C's contain your separate SSN's.

It's always best to separate business from personal. It may not be practical to do so in very small business activities.

-- Paul A. Thomas, CPA Athens, Georgia

Reply to
Paul Thomas, CPA

[...]

Paul Thomas got it right. The new federal law allows a taxpayer and spouse to each file a Schedule C for a joint venture, instead of a partnership return. Previously this was only allowed in community property states. There is no such thing as a "joint" Schedule C, just as there is no joint self-employment tax. Each spouse must account for his or her share of self-employment net profit and pay SE tax accordingly. Two Schedule C's, in other words. The EIN is a two-edged blade. It can help for superficial privacy (you don't have to put your SSN on 1099-MISC forms) and should be used for self-employed retirement accounts. On the other hand frequently the IRS thinks EIN = employees, so they will dog you every quarter to file an employee wage and withholding return.

-Mark B.

Reply to
Mark Bole

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