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- Jun 7, 2013
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- 10,154
Laws are different in every state, but here in CT, you would need to collect sales tax on any work you do, so that would be something to do since if they find you were not remitting sales tax, you will owe all the back taxes as well as late penalties. I don’t believe you have to register as a business since any retail sale is taxable, so you might be able to register as your person and collect the tax and remit while keeping your business under the radar.
We also have to pay personal property tax on everything used in the business. For a machine shop, that would mean every tool in your shop, desk you use to do your bookkeeping, computer, pens, etc. The local tax auditor probably won’t believe one micrometer is used in the business, but another one isn’t, so once you start a business, everything related to that business is taxed, so best to stay under the radar as long as you can, but be mindful that they may hit you up for back taxes if found out.
Where I live live, they seem to be ok with a business run out of a home, as long as there are not any customers coming there, or more than normal deliveries for a residential area. For my neighbor, they seem to have at least one per day, so I don’t think they could complain about my deliveries lol.
If you decide to stay under the radar, do not put your address on anything online if you can avoid it. Google searches various databases and adds any company listing they find to their maps. I don’t know if your local town references these maps to find tax cheats, but I do know that is what I would do if that was my job. I have found a previous company I had shown at my home address, but not my current company, so not sure how often that is updated, or how they do that.
It sounds like you have a great first lead, so hopefully it works out for you and you can build a nice side business.
The answer to the payment problem is cash on delivery. To make that attractive to the customer, it may be necessary to work a bit cheaper than the average purveyor, but since you won't be claiming the payments for taxes, it may be worth it. It is a good plan to claim anything that comes along via vhecke, and not so for cash jobs; not that I would ever do such a thing ---Laws are different in every state, but here in CT, you would need to collect sales tax on any work you do, so that would be something to do since if they find you were not remitting sales tax, you will owe all the back taxes as well as late penalties. I don’t believe you have to register as a business since any retail sale is taxable, so you might be able to register as your person and collect the tax and remit while keeping your business under the radar.
We also have to pay personal property tax on everything used in the business. For a machine shop, that would mean every tool in your shop, desk you use to do your bookkeeping, computer, pens, etc. The local tax auditor probably won’t believe one micrometer is used in the business, but another one isn’t, so once you start a business, everything related to that business is taxed, so best to stay under the radar as long as you can, but be mindful that they may hit you up for back taxes if found out.
Where I live live, they seem to be ok with a business run out of a home, as long as there are not any customers coming there, or more than normal deliveries for a residential area. For my neighbor, they seem to have at least one per day, so I don’t think they could complain about my deliveries lol.
If you decide to stay under the radar, do not put your address on anything online if you can avoid it. Google searches various databases and adds any company listing they find to their maps. I don’t know if your local town references these maps to find tax cheats, but I do know that is what I would do if that was my job. I have found a previous company I had shown at my home address, but not my current company, so not sure how often that is updated, or how they do that.
It sounds like you have a great first lead, so hopefully it works out for you and you can build a nice side business.