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[Imported] Registering as a Business / Taxes
Topic Started: Jul 4 2010, 02:31 PM (410 Views)
Frivi
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I asked on the old forums what experiences people had with registering their games as businesses and tax issues. I'm only quoting the most informative responses here XD

Quote:
 
EVE:

I formed an LLC to own my SIM game(s). It is just my personal opinion, but I think it is a really good way to go, if you're gonna own/run a business. It offers liability protection of your personal assets, as well as making your business a business in the government's eyes. LLCs are very easy to form and manage. I spend maybe 4 hours a month max doing "LLC stuff". There is a little bit of a learning curve to understand the ropes of owning a company, and there is an expense associated with it as you will need professional guidance at times (CPA and Attorney), and filing fees for various things. Taxes are easy. One of the benefits of LLCs is that it uses pass through taxation, so that you don't get taxed twice. (other types of business entities, except S-Corp, would have their business income taxed, and then taxed again when you do profit distributions) As long as you don't hire any employees, you'll do your LLC taxes once a year and it simple enough that it can be done via Turbo Tax. You can also elect to have a CPA do them (which is what I'm doing). In any case, if anyone has any questions about LLCs feel feel to PM me or post a question to me. I'm new at it, but when jumping into owning an LLC ...you sorta have to learn real quick. ;)


Quote:
 
JADE:

1. If you're under 18 everything has to be done in the name of a parent or guardian. If you're making a profit over your state/country limit (see item 2) then your parents must claim it on their income taxes.

2. In VA if you make under 5k a year you don't have to claim it. This varies depending on where you and where you live.

3. If your site is small and you're not making much then claim whatever profit you make over 5k on your income taxes. In essence that means you're a sole proprietor. Any legal claims brought against you will go against your personal assets (house, car, etc).

4. You have to claim state/local and federal taxes. Some states also require you have a business license. Again you need to check with your state/local laws to find out what you need to do.

5. LLC is the safest way to go and the least hassle as far as taxes go. They're usually fairly inexpensive to start ($100 - $500 initial fee) and then a yearly fee ($30 - $100 from what I've seen. As an LLC you have to keep a bank account for your business, keep a general ledger of your business transactions and file your business profits separately from your personal income.

6. If you have employees things become more complicated. Over x number employees (varies by state) you have to provide health insurance and other goodies. I've found its much easier to have contractors because they're easier to account for and you don't have to give them health and medical benefits.
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