Another spin-off

[sofadoc]

With all of the lively discussions about wholesale vrs. retail, the threads have gotten rather lengthy. One of the posts asked the question "Did you get a tax ID before you started?"
I had to laugh, because it made me think of my Grandmother. She owned the family upholstery/mattress renovating business back in the early 60's.
She had a crew of men to handle the mattress end of things.  This crew consisted mostly of drunken derelicts who were looking for a few bucks in order to square their accounts with the local bootlegger.
On payday, she would call them over to "figger" them.
"Well...let me see..... I figger you made about $55 this week..... and I'll figger about $10 for income tax.
I'm positive that she absolutely NO IDEA that she was supposed to send the tax money to Uncle Sam (It isn't like THOSE guys were going to file a 1040 anyway).
I doubt that she ever had a sales tax ID, or employer ID#.   The only document from the state that she had, was a bedding permit. She cherished it as if it were a degree from Harvard.
All it was good for, was acquiring those stupid "Do not remove" tags that went on the end of mattresses.
In her retirement years, I'm sure that she wished she HAD sent Uncle Sam a few bucks along the way.

[christwo]

You know, to be honest getting my license and tax id number was not really on the top of my list of things to do when I started this business. The only reason that I did was because when I began looking into vendor's it seemed every one required a contract which in turn required a tax id number. I also figured stating the business license number may work as an avenue for legitimacy when advertising. Figured it really can't hurt anything, I just document everything bought through my vendor's and figure out the 7% sales tax (Tennessee) and put that into a separate account, and send it in every month. Thought I may as well start everything out on the right track so it never comes back on me later.

[byhammerandhand]

Yes, I got a taxid.    Getting all those ducks in order at the business start up was one of the most detailed things I had to do.   EIN, vendor's license, DBA filing, business name, bank account,  business format (sole prop, partnership, LLC, S-corp, etc.), etc., etc.


There was a lot of discussion on the radio today about reducing regulation on small businesses.   Obama is claiming credit, as is my senator, who also happens to be on the Super Committee.

It got me thinking of all the hurdles to jump to hire employee #1.   Payroll, withholding, worrying about garnishment of wages (child support, etc.), health insurance, unemployment insurance, workman's comp, MSDS on file, company policies and procedures manual, vehicle insurance rider, background check, etc.  etc. etc.   I like subcontractors.

[Mike8560]

A uly my dad starred this affer he became paralized and because he was is why I got involved but that's another thread. In new Hampshire theee was no sales tax  or income  to no I had no tax I'd.  Did t need one dist.  Afger mo ing to Florida I had to get one

[Mojo]

Keith:

Thank you for your post. It reminded me why I want to control my business so I do not have to hire any help. :)

You did forget to mention - sick days, days they show up late when your rushed, days they need to leave early, days they simply do not show up or call, long breaks, etc. etc. If I ever reach the point I need to hire someone, I will probably close the doors and go fishing. :)

I incorporated years ago ( 1980;s ) , first as Talin Media Group and then as Stone Vos Inc. I incorporated not for the tax id number but for a few other reasons - the liability protection offered under a corporation, the wholesale discount rates offered by suppliers and of course the amazing tax write offs offered to Sub-chapter S corporations. 

Talin Media Grouo was my marketing and PR company. I later changed that to Stone Vos Inc ( after my divorce ) for legal settlement purposes. When I retired from marketing and business consulting work the corporation lay dormant in Michigan until I started upholstery. I then dissolved the corporation in Michigan and then incorporated again in Delaware.

I had a high powered corporate lawyer who was a long time friend guiding me through the entire process and I learned a lot. To this day the one thing that scares me more then anything ( especially since we live in a litigious society ) is liability. When your sitting on a lot of assets such as homes, property, cars, boats, trucks, motorcoaches or whatever, you want to protect yourself in the event of a law suit. The easiest way is by incorporating.

Frivolous law suits seem to be a part of our everyday life and after watching my parents go through a horrible frivolous law suit that cost them a ton of money to defend I knew I wanted to do everything possible to cover my ASSets.

I welcome the day tort reform happens and they pull these lawyer ad's from TV. But that is fodder for another thread. :)

Chris