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Maryland, USA Sole Proprietor laws

Discussion in 'Legal Issues' started by PalePeach, Nov 22, 2019.

  1. #1
    Hello,
    I saw that there was another tax question thread already on the front page of this forum, however it didn't have any of the information I'm looking for so I hope this isn't ignored/ buried.

    I live in Maryland in the USA and I just started a business selling soap and bath bombs. I have a DBA for my company, and a have bank account that my profits go into that is separate from my personal bank account (although at the bank this is a personal type account and not one of the business type accounts they offer). I tried to find some answers by googling but I was honestly confused by the legal jargon and I was wondering if anyone could explain to me in layman's terms the answers to a few questions.

    To avoid confusion from here forward I will refer to my business by the name I have trademarked, "Kosmerta" and I will refer to myself in first person (I, me)
    SEMrush
    To my understanding with the DBA I AM Kosmerta. Additionally in Maryland a Grower or Manufacturer does not need a license to sell anything they have produced, so I do not require a license to sell my products as Kosmerta.

    My questions are...
    • As a sole proprietor would I file taxes regarding my income as Kosmerta the same way I would file as if I worked for an employer? Do I need to get a tax ID # for Kosmerta, or would that be my personal SS#?
    • How would I file the sales tax from products I sell?
    Answers for state and federal laws would be helpful, and any answers will be appreciated!
     
    PalePeach, Nov 22, 2019 IP
    SEMrush
  2. mmerlinn

    mmerlinn Notable Member

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    #2
    Your best bet for Maryland laws is to contact your local State of Maryland tax office. Any advice you get here and on most other forums is likely to be WRONG.
     
    mmerlinn, Nov 22, 2019 IP
  3. PalePeach

    PalePeach Greenhorn

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    #3
    Thanks
     
    PalePeach, Nov 22, 2019 IP
  4. jrbiz

    jrbiz Illustrious Member

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    #4
    No idea on Maryland laws, but I suspect that they mirror the Federal tax approach. A sole proprietorship means to the IRS that you, personally, are in business. All income that you generate from all activities (employment, business income, product sales, consulting, etc.) are reported on your personal tax forms. You may also list business expenses as deductions. But you need to know which ones are eligible and how to do this. You need a tax accountant to tell you what to do and how to set up your records, etc. Just because it is a sole proprietorship does not mean that it is simple to account for business revenues, expenses, and income. You need expert advice on this.
     
    jrbiz, Dec 3, 2019 at 1:34 PM IP