Thread: How is your business set up?

Specifically asking those who work individually as soloists. I'm exploring the pros & cons of assumed name business (a DBA).

Are you officially set up as an assumed name (a DBA) and work that way? How do you keep bookkeeping straight? What about taxes? Or is there no official business (you are not a DBA or any other legal business, it's just you personally) & you pay tax on your dance income on your regular personal income tax every year? If you did either, did you consult with a CPA beforehand?

If you don't want to answer here, PM-ing me is fine also. Just trying to decide the best course of action.

Originally Posted by DancingRuya

Specifically asking those who work individually as soloists. I'm exploring the pros & cons of assumed name business (a DBA).

Are you officially set up as an assumed name (a DBA) and work that way? How do you keep bookkeeping straight? What about taxes? Or is there no official business (you are not a DBA or any other legal business, it's just you personally) & you pay tax on your dance income on your regular personal income tax every year? If you did either, did you consult with a CPA beforehand?

If you don't want to answer here, PM-ing me is fine also. Just trying to decide the best course of action.

Great post!! I've been wondering the same thing and have been doing research for the past week or so..I'm looking into expanding my business too, but not sure how to go about it...It will be very helpful to see what those with experience have to share ;)

I'm a sole proprietor. I have a DBA name, but that doesn't affect my business structure or my taxes. I file a Schedule C with my 1040 to report my business income. The good thing about having a DBA name is that I can conduct transactions under my business name rather than my real name. This actually makes bookkeeping easier because I keep separate accounts under my business name.

You don't have to do anything to become a sole proprietor; you just ARE one, as soon as you are earning income from an activity with the intent of making a profit. From the IRS web site:

Sole proprietorships. A sole proprietorship is an unincorporated business that is owned by one individual. It is the simplest form of business organization to start and maintain. The business has no existence apart from you, the owner. Its liabilities are your personal liabilities. You undertake the risks of the business for all assets owned, whether or not used in the business. You include the income and expenses of the business on your personal tax return.

Hope this helps!

Ditto to Nisaa.
DBA name. DBA business bank accounts AND EIN number so I never have to give out my SS number. But at tax time I'm still a "sole proprietor".
Having your bank account separate makes it SO much easier. Get a good accountant though to help you with taxes. Makes all the difference in the world!

Downside to sole proprietorship is that (at least in most states...could be wrong in some) if someone decides to sue you, then all of your assets are fair game. I mean your house, your car, etc. If you set up as a business entity that's not necessarily true...they can only seize your business assets (unless they sue you personally).

I'm set up as an LLC. At tax time, you can file those on your personal taxes provided the income is less than so much I think. Didn't cost me much to set it up, was easy to do, and is affording me some protections that make me feel much better in a "cover your a$$" kind of way. Because I'm the only member of the LLC, I just file on my personal taxes. But I do own a second LLC with a partner and was still able to file that one on my personal taxes as well. I have a tax guy (not a trained monkey but a real honest to god tax guy) who takes care of it for me every year...he's worth the $$.

I have a DBA, but you technically don't need one... well, you do legally, but you can run your business w/o one. I've been reporting dance income/expenses on my taxes for the past 10 years. I've only just gotten a DBA last year (mostly because I've moved a lot in the last 10 years as well).

I also have a separate business bank account. Everything related to dance runs through that--NOT through my personal account. This was the advice my accountant gave me years ago and it actually makes my life a lot more cut and dry. If I want to earn personal income from my dancing, I pay myself from the dance account--I literally write myself a check and deposit it into my personal account. This keeps all the books nice and clean, the way my accountant and the IRS likes them!

At tax time, everything is reported on the Schedule C. The profit or loss is then accounted for on my 1040.

I should add that all of this is overseen by my accountant--someone I know and trust. He's the one that helped me set up the business years ago, he's done my taxes for the past 10+ years, he answers all my questions--basically, he knows my finances and guides me through the tax maze. I strongly strongly recommend you find and develop a relationship with a tax guru you can trust. They are worth their weight in GOLD!!

Thanks all. I work at a law firm & we set up LCs/LLCs & LPs for folks incorporating, so I know there can be more protection that way in the event you're sued vs. a dba where your personal property could be gone after, but I have to wonder the liklihood of being sued & that actually happening (not saying 'never', just the probability of it). I think a dba is probably the best way for me to go, and I would definitely have a separate bank account to keep the books straight.

This may be something I really need to discuss with a CPA (I do have a good one in mind, btw - the same one that does the firm's books), but I wonder about things like start up costs, business expenses, etc. Specifically, start up money (and really any money until there's a profit coming in) would be coming from my personal account/my own pocket, so how would that work? And also what about expenses made prior to actually setting up the dba - like costumes & props purchased prior to the dba officially being set up/filed/registered?

Also just curious, did you set up your dba as just your dance name or did you pick a business name. Ex.: "Shapoopie" vs. "Shapoopie Bellydance"?

Originally Posted by DancingRuya

This may be something I really need to discuss with a CPA (I do have a good one in mind, btw - the same one that does the firm's books), but I wonder about things like start up costs, business expenses, etc. Specifically, start up money (and really any money until there's a profit coming in) would be coming from my personal account/my own pocket, so how would that work? And also what about expenses made prior to actually setting up the dba - like costumes & props purchased prior to the dba officially being set up/filed/registered?

All very good questions... unfortunately I don't have answers. I set up my biz so long ago I don't remember how I did it... and tax laws have surely changed since then anyway. Consult the CPA on this.

RE: incorporating--yes, it gives you more protection. It's also expensive. If you carry liability insurance, you should be ok if someone sues you. If you become an international dance sensation with studio franchises, promotional products, and are getting paid to go out clubbing, then yes... it may be time to incorporate.

Also just curious, did you set up your dba as just your dance name or did you pick a business name. Ex.: "Shapoopie" vs. "Shapoopie Bellydance"?

My DBA is simply "Aazura"... but you can set it up anyway you want.

I incorporated my LLC in Louisiana...where it cost me less than $100 to do it. Actually I lie...it cost me $120 because I went down to the office and had them process it on the spot...so I paid extra for expedited service. Check your state cause you might be surprised at how cheap and easy it is. Virginia was similarly small business friendly when I was there years back. North Carolina was not so friendly...they wanted to charged me almost $500 just to be able to do business in their state with my existing LLC...wanted to charge me more to register a new business. Some states are more small business friendly than others.

My business name is "All Points Belly Dance" and I've also got a registered fictitious names "Safira", "Safira Dokos", "Princess Adorabelle", and "Fiona" (I play a variety of characters for different shows). So I never have to tell anyone my real name if I don't feel like it...which is nice for me because I've had stalker issues in the past. I've also registered all my logos and trademarks as well. I got burned with someone using my artwork in the past so I'm cognizant of that...plus my logo is based on the tattoo on my arm, so there is a big branding thing involved with it and I wanted to be more safe than sorry with it.

As far as the capital you bring into the business, you will need to discuss that with a CPA or lawyer...I've had businesses in three different states and they all three had different rules. I do know that once you are incorporated you can claim all your costumes, workshops, etc as business expenses from that point on. I even get an allowance for special makeup and hair products that I use only for performing. All that is best learned from a CPA in your state though because those rules can be TRICKY.

Single proprietor, with DBA set up as Galatea Middle Eastern Dance. I also have a Seller's Permit through the state of Wisconsin, which is required to report Sales and Use taxes on the hipscarves and DVDs I sell in classes to my students.

Income reported via Schedule C, attached to 1040 Income Tax form filed jointly with hubby.

Separate checking account and credit card for all dance expenses and income. Like aazura, when I need to pay myself wages, I write a check from my dance account and deposit it into my personal account.

Taxes prepared with a tax prep company that specializes in small businesses.