I am starting up a web design venture and intend on doing so as a sole proprietor. Although I am only 17, and have just about no experience in taxes and really anything governmental, so... What kinds of things do I need, do I have to pay taxes even before I'm 18? Anything you can provide for me on this subject would be greatly appreciated. Thanks. Edit: I just read in a post on digitalpoint forums that if you are underage, you aren't allowed to enter a legally binding contract... Is this true? I have already put together a contract for my venture... Although I suppose since this is web design and deals mostly with the web, I could just stick it all into a Terms of Agreement checkbox...? Oh, and I live in Florida, USA.
Contact your local "county clerk". They can answer more of your questions about starting it. Usually it's a small fee and a couple forms. And yes you have to pay taxes even if you're 17. I was paying income tax at 15 years old.
Luckily my mom's friend provided me with some insight on this topic. I'll be starting an S class corporation (as a sole proprietor [no employees]) so that way I have personal protection and I will have my own business account.
The only downside being 17 your not legal to contract with others. At least in the area that I am in.
smart move doing this at 17. Lets hope you can continue this for the rest of your life and will never have to work for ' the man! '
You can not register a business. Look into forming an LLC. Have your parents form it with you being one of the officers that are authorized to enter into contacts for the company. Your parents will be the registrars and official owners, however, you will be able to enter into contracts in the name of the company. I know of a webhost that is 17 and has his business registered as an LLC in FL this way. You yourself can not register the business at all. Must be your parents. (or another adult)
As a minor, you'll need a parental signature on any of your government forms. You should look into an LLC (as opposed to S-class corporation) because the LLC offers you a number of protections that the S-class designation does not. You will have to fill out forms with the state in order to officially form your business, but if you really want to get technical, you may want to consider looking into registering your business in other states (Nevada and Delaware have generally had favorable conditions for forming LLC's) - but with the current economic downturn, a lot of states may be making it more enticing to form a business there (regardless of where you do the actual work).
What would be the pros of registering in those states as apposed to Florida? Also, could I get an estimate on the cost of forming as an LLC?
Madman340: I would advise you to take a look at the small business administration's website as it details the structures, as well as the pros and cons of each. I highly recommend reading through this site for a while as it will answer a lot of questions you didn't even know you had!
I formed my corporation in Florida several months ago. I had called the IRS to get a tax ID assigned to my business name and then it cost me about $200 max to actually register my corporation name. All that was left was I had to open the bank account under the business name with a $50 deposit. In the end, it put me back about $250. Not too big of a deal.