Thread: Business Licenses

Alright girls. How many of you have business licenses for your state/county/city if you operate as an individual (proprietary) business under your own name (or something containing your name, which I, possibly mistakenly, think is the same thing)? I mean this particularly if you just do small things here and there...i.e., work one restaurant job and/or accept occasional gigs and have a website. My understanding is that if the INTENT is to grow business on a website, most states require a license.

I'm so confused....I'm not sure if I need one or don't. And these SBA websites for Tennessee are confusing as heck.

I know beyond a shadow of a doubt that I am currently making no profit (actually, in a loss) for dance because I spend every penny and then some on either lessons/workshops/costumes/makeup. Help?

I have a business license, but I'm not sure what you question is?
Maybe cause I still have sleepy brain.

If you are conducting a trade and accepting payment for it (even if you are taking a loss), you need a business license.

I have had one since I started my biz and it never ceases to amaze me how many dancers in my area operate without licenses, insurance, etc. For me, it's just about protecting myself and my biz. Why take the chance of getting fined, sued, or worse?

If you're me, you didn't oknow you needed one until after you've beenn up to it awhile.

I don't have a business license per se, but I do have a DBA registered with my county that associates my real name with my business name. Unless that's considered a business license in and of itself?

I registered my DBA as soon as I started claiming my dance income on my tax returns, which was pretty much from the get-go.

I'm not sure what you mean by a 'business license.'

My state only requires licenses for certain professions (hair stylists, massage therapists, CPA's etc) and doesn't have one for performers or dance instructors.

I do have a state sales tax number, but that's only for selling merchandise, like hip scarves.

If you have a location, the city you're located in might require some kind of license. If you're accepting checks written to a name that's not your own, you'll have to register your DBA name with your county.

But as far as I know, there is no generic license that makes you officially a business.

If you're making money that's not being reported as regular income to the IRS, then you're a business and you're supposed to be filing business taxes. But if you're losing rather than making money, the IRS considers it a hobby.

When your income exceeds your expenses from any activity, or if you're ATTEMPTING to earn a profit, then you're supposed to file a Schedule C on your 1040 and report it. No license required, no formality of declaring yourself a business. You just are one.


Does that answer your question at all?

Originally Posted by laura 2

I don't have a business license per se, but I do have a DBA registered with my county that associates my real name with my business name. Unless that's considered a business license in and of itself?

I registered my DBA as soon as I started claiming my dance income on my tax returns, which was pretty much from the get-go.

Different states and municipalities have different regs. In my case, I'm in St. Louis, Missouri, so I have to file a fictitious name registration with the state and I have to maintain a business license with the City of St. Louis.

I STRONGLY suggest that all dancers contact their local city/county offices and find out the regs in your area, because chances are you have to be licensed.

Originally Posted by Sonja2

I'm so confused....I'm not sure if I need one or don't. And these SBA websites for Tennessee are confusing as heck.

Your State website is simpler. Here's what it says:

As a sole proprietor, you only need to obtain a business license from the county and/or municipality in which you operate.

So contact your city and county to find out if you need one. In my city/county, I didn't need one until I opened an actual location (though if you teach classes in your home you will).

Here's the website for further state info:
Tennessee Department of Economic & Community Development - Business Support Programs

Originally Posted by nisaasaintlouis

Different states and municipalities have different regs. In my case, I'm in St. Louis, Missouri, so I have to file a fictitious name registration with the state and I have to maintain a business license with the City of St. Louis.

I STRONGLY suggest that all dancers contact their local city/county offices and find out the regs in your area, because chances are you have to be licensed.

One bit of info might help the discussion: the business licensing requirements in a city are merely another way to extract revenue. With a city business license, the city takes your money and knows you are conducting a business in the city; it isn't licensing you (in this case aka "authorizing" you) to conduct a certain type of business (ie hairdresser, dance teacher, theatre owner, restauranteur), merely that you've paid for the privilege of doing business within city limits; other types of licensing (usually state) authorize you to be a hairdresser, sell alcohol, etc.

Deborah

Originally Posted by Lauren_

if you're ATTEMPTING to earn a profit, then you're supposed to file a Schedule C on your 1040 and report it. No license required, no formality of declaring yourself a business. You just are one.

Yes...technically, according to the IRS, anybody engaged in an activity with the intent to make a profit is running a business. You won't owe self-employment taxes, though, unless you make more than $400 net in the course of the year.

Originally Posted by casbahdance

One bit of info might help the discussion: the business licensing requirements in a city are merely another way to extract revenue. With a city business license, the city takes your money and knows you are conducting a business in the city; it isn't licensing you (in this case aka "authorizing" you) to conduct a certain type of business (ie hairdresser, dance teacher, theatre owner, restauranteur), merely that you've paid for the privilege of doing business within city limits; other types of licensing (usually state) authorize you to be a hairdresser, sell alcohol, etc.

Deborah

True! And boy, don't I feel it every year...

Sonja2- I have a sole proprietor LLC, because my business does multiple things and this way my personal assets are more protected (yes i have insurance for my llc!).
My advice would be to find your nearest small business association, often times these will have low or no cost services available to small businesses and women owned businesses. you may be able to get many of your questions answered there.

Okay I'm starting to wake up.

So I have a business license to perform business in Multnomah county. I got it cause it helps justify my expenses when taking deductions and I can take more deductions like the depreciating value on my car. Not only that, but some companies require that you have a license in order to purchase their goods and services at a wholesale cost. I am also retailing merchandise to demonstrate that this is a for profit business and not just a hobby. This last year is my start up year and I have about 7 thousand dollars in deductions that I desperately need due to my income. Now I probably do not need a license to justify my deductions but I believe it demonstrates intent of a business than just being an expensive hobby. I like to cross my T's and dot my I's.

Since last year was a start-up year it is not unusual for business to take heavy losses in their first and second year... If my facts are correct (someone please correct me if I'm wrong) it is not unusual for a business to loose money in their first three years.

So I have three years to make this a profitable business....

Originally Posted by AngelaDiCaprio

Since last year was a start-up year it is not unusual for business to take heavy losses in their first and second year... If my facts are correct (someone please correct me if I'm wrong) it is not unusual for a business to loose money in their first three years.

So I have three years to make this a profitable business....

I am in my 3rd year of business, and 2008 will be the first year I show a profit on my Schedule C.

Originally Posted by AngelaDiCaprio

Okay I'm starting to wake up.

So I have a business license to perform business in Multnomah county. I got it cause it helps justify my expenses when taking deductions and I can take more deductions like the depreciating value on my car. Not only that, but some companies require that you have a license in order to purchase their goods and services at a wholesale cost. I am also retailing merchandise to demonstrate that this is a for profit business and not just a hobby. This last year is my start up year and I have about 7 thousand dollars in deductions that I desperately need due to my income. Now I probably do not need a license to justify my deductions but I believe it demonstrates intent of a business than just being an expensive hobby. I like to cross my T's and dot my I's.

Since last year was a start-up year it is not unusual for business to take heavy losses in their first and second year... If my facts are correct (someone please correct me if I'm wrong) it is not unusual for a business to loose money in their first three years.

So I have three years to make this a profitable business....

You must show a profit two out of five years for the IRS to consider you a legitimate business (able to deduct business expenses); otherwise, it's considered a "hobby" and you have to declare your earnings from your "hobby" but you are not able to deduct expenses. Isn't that special?

Deborah

In our state/city, all businesses must have a business license. So if you take payments for services or merchandise where I'm at, then yes, you need a license. But it's only like 40 bucks.

Hi Deborah


actually expenses are deductible, they are the cost of doing business and are determined in your balance sheet for profit or loss.
considered business expenses, they need to be accounted for in your books.
like costumes, dance lessons, travel expenses, inventory, cd's you purchase to perform your work. rental fee's you pay for classes, Stage make-up It all counts and adds up. an office in your home can take a percentage off your income. so you can deduct a portion of your rent or house payment.

Thank you all so much. I now have located all the necessary forms & plan to file them all on Monday. Whew!

Originally Posted by AngelaDiCaprio

Hi Deborah


actually expenses are deductible, they are the cost of doing business and are determined in your balance sheet for profit or loss.
considered business expenses, they need to be accounted for in your books.
like costumes, dance lessons, travel expenses, inventory, cd's you purchase to perform your work. rental fee's you pay for classes, Stage make-up It all counts and adds up. an office in your home can take a percentage off your income. so you can deduct a portion of your rent or house payment.

I should have stated that sole proprietorships/ownership as "individual" are required to show a profit two years within any five year period. The only time a sole proprietorship/individual cannot include expenses is if the business has been deemed a "hobby" for IRS purposes (not showing a profit at least two out of five years); I believe if one's business (like most of our BD businesses) is no longer considered a business and has been designated a "hobby" by the IRS, some sort of notification is sent by the IRS.

I am not a tax-preparer, accountant, or lawyer. Although I think it's perfectly fine to discuss these things here with fellow Bhuzzers, we should all discuss any specific tax questions with a tax person.

Deborah

Originally Posted by casbahdance

I should have stated that sole proprietorships/ownership as "individual" are required to show a profit two years within any five year period. The only time a sole proprietorship/individual cannot include expenses is if the business has been deemed a "hobby" for IRS purposes (not showing a profit at least two out of five years); I believe if one's business (like most of our BD businesses) is no longer considered a business and has been designated a "hobby" by the IRS, some sort of notification is sent by the IRS.

I am not a tax-preparer, accountant, or lawyer. Although I think it's perfectly fine to discuss these things here with fellow Bhuzzers, we should all discuss any specific tax questions with a tax person.

Deborah

I agree Deborah, bhuz should not replace expertise of a tax man or CPA...
Everyone should consult one when starting a business.

I see no harm in discussing and educating on things that we know. So long as the discussion does not constitute tax evasion.

Originally Posted by AngelaDiCaprio

I see no harm in discussing and educating on things that we know. So long as the discussion does not constitute tax evasion.

Definitely!

Deborah

this is why i live in the COUNTY of fresno, NOT THE CITY.the rules are diff.i do not need anything!
i use my ss# for taxes! so, do your homework!

Hmm....would my accountant tell me if I needed a business license? Cuz I don't have one. And he does my taxes every year. And I show a profit......

I'm assuming that since he's never told me I needed a business license, that I don't need one. But maybe he wouldn't know? I thought all I needed to do was start reporting my income and I was automatically a "sole proprietor"?

Ugh, I hate this kind of stuff!

Originally Posted by danielabellydance

Hmm....would my accountant tell me if I needed a business license? Cuz I don't have one. And he does my taxes every year. And I show a profit......

I'm assuming that since he's never told me I needed a business license, that I don't need one. But maybe he wouldn't know? I thought all I needed to do was start reporting my income and I was automatically a "sole proprietor"?

Ugh, I hate this kind of stuff!

I hate it too. An accountant probably won't be much help here because taxes are a separate issue.

A lot depends on how things work in your particular municipality. I would recommend checking the web sites of the city, county, and state in which you live...they'll have the info you need.

I don't think so. I planned to claim taxes on anything I made, but didn't know about the business license part until I started my own investigating.

Daniela -- I stopped by my City Hall and they were able to tell me what I needed for the city -- which was nothing until I opened a physical location in the city.

They were also able to refer me to the exact people to check with in the county and state, and gave me unofficial information on those requirements, which proved to be correct.

In my locality, I didn't need ANYTHING until I opened a location and started selling products. But checking it out was pretty quick and painless.

Originally Posted by Lauren_

and started selling products.

Oh, I forgot to mention, I did need to get a vending license from the state in order to sell hipscarves, veils and CDs in my classes.