Mailbag: Taxes, FEINS, Inventory Management and Some Personal News

Posted on December 5th, 2009

My wife and I went to the obstetrician yesterday and found out that she’s literally ready to deliver at any time now. So inevitably in the next day or so, we will be having another little boy in our household! The timing is also such that our new house closes escrow the day after we are due, my mom is flying in and my brother is getting married all around the same time too. It’s going to be a busy week. It’s hard to tell how much of an impact this will have on our other activities, but I wanted to let you all know that I may be MIA for a couple weeks in terms of answering questions. But without further ado, here are a few questions for the week.

I’m creating a website to promote affiliate products. I wasn’t sure if I needed to apply for a separate taxpayer ID if I’m a sole proprietor. If I do get a taxpayer ID for the business, do I have to file a separate tax return, or can the business expenses/profits be included on my personal tax return? No matter what business you are involved in, I would always recommend that you get a separate taxpayer ID. Otherwise, you’ll end up having to give out your social security number to all of your affiliate companies in order to get paid. Of course there is nothing wrong with that but it’s generally better to keep your SSN private if possible. As for your taxes, whether you have to file a separate tax return depends on your corporate structure. If you have a flow through entity like an LLC or a sole prop, then you do not need to file separately. However, you will need to include a schedule C with your return.

I am 22 years old and currently working at a financial company. I have not yet finished my undergraduate degree due to lack of funds, and I was hoping that as I work now I can develop a web business that I can hopefully keep going to offset tuition when I go back to school next year.

I am currently trying to brainstorm and organize my ideas for a my web business, but any tips you have would be great. Your website is so far a great resource, and I look forward to reading more. I’m glad to hear that you want to start a small web business on the side. Picking a niche to pursue can be a pretty difficult task. Just keep in mind that depending on your motivations, your business idea doesn’t have to be a home run, knock it out of the park idea. With the proper marketing and positioning, you can make some decent money on a wide variety of ideas even if there’s a lot of competition. The story about how my wife and I stumbled upon our niche is well documented on the blog already at the links below.

How We Got The Courage To Start Our Own Business How We Found Our Niche For Our Online Store

My wife and I looked into a bunch on non-web ideas initially as well because we were afraid of the learning curve involved with running a web based business. But I’m glad that we ultimately decided to run our business purely online. Here’s an article that talks about Business Ideas That Didn’t Pan Out For Us Currently, we rely on our shopping cart software to track all of our inventory. To prevent selling items that are out of stock, our shopping cart will not let anyone complete a purchase unless we have sufficient stock on hand. In terms of actual storage, all of our products are organized nicely on shelves, however we don’t yet have an automated way of tracking defective items and returns. Eventually, we plan on tagging all of our merchandise with a barcode and using a barcode gun to keep track of stray inventory.

Similar Posts:

• How to Start a Business with only Fifty Dollars
• Car Fashion
• How To Get Free Technical Support For Your Online Store
• Why, and How to Keep Your Business and Personal Banking Separate
• Health and Safety Items for Promotional Gifts

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