Ok, i am 16 and i know that legally i am not allowed to start a business but my parents could. They said they would do whatever was needed under their name if i came up with a good enough business plan and found out what i needed to do as far as filing taxes. My questions How do i actually start up a "business" Do i need to copyright or trademark anything for my website? What do i need to do as far as taxes? Ive read stuff about sole proprietorship, corporation, and partnerships?(benefits/disadvantages?-in my business class a year ago i heard that corps get double taxed?) Those are just some of the questions i had but what else would i need to think of as far as legalities go? Any links, info, or anything else that can be contributed for learning what i need to do would be greatly appreciated
At 16 in most states you are right that you do not have the "legal" right to contract. That doesn't mean you can't start a business. It just means that the people you deal with can't enforce any contracts. A sole proprietorship in your own name is the easiest to start. There are no start-up expenses except maybe for a local business license if required. I am going to assume this is internet related since you posted here. The only real requirement is to make sure you pay in quarterly taxes if you are making money. If you are selling stuff in your own state you may need to collect sales tax. Back to the tax stuff. If you can be claimed on your parents return you net income is reduced from the $8K or so you could otherwise earn before owing any taxes. No matter what your net is you will owe FICA at the rate of 15.3% of your net income. Liabilty insurance is the only other real start-up expense you may have. This depends on the business. I am here at least once a day a will be glad to answer follow-up questions.
What Colbyt said is right. I'm pretty sure that in every state, you must be 18 to enter into a contract (with certain exceptions, such as the case where you are 16 but misrepresent your age). I really wouldn't recommend putting it in your parents name if you are selling something that can lead to liability.
What do you mean "with certain exceptions, such as the case where you are 16 but misrepresent your age"? Isnt that illegal? And everything i am doing is going to be completely legal and reviewed by my parents lawyer(thats why i have to come up with a good business plan and learn about everything before they pay their lawyer to check everything out) Is there a certain tax form that i would have to fill out because my site would basically be a review site and earn revenue from affiliate commission (example lunarpages has a certain tax form they require their affiliates to fill out) I am planning to do things with clickbank and other similar sites like clickbank would i have to fill out a certain tax form? Also is there somewhere on the internet that i can find this information about taxes ect like a government site?(just so i can read exactly what they say)
At the end of the year you will need to file a tax return (form 1040) and your business income and expenses are reported on a Schedule C. FICA contributions are computed on form SE. For each affiliate program you join they will require you to fill out a TIN form. All this does is certify your name, address and FICA number. If you have gross earnings of over $599 from any one program, they will mail you a 1099 by Jan 1 of each year. All earnings must be reported whether you get a 1099 or not. The income just goes on a different line for with or without the 1099. This link http://www.irs.gov/businesses/index.html will connect you to more than you care to read. Most of the publications are in PDF format. If your state has an income tax be sure to review their information also. You may or may not need a local business license. That would be last on my list of worries for an internet business. More?