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Old 04-26-2011, 04:29 PM
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Join Date: Apr 2011
Location: Oklahoma
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Question Extreme sport event business

My husband and I have been doing sport bike stunt shows at town events for the past 3 years now. We have been listing it as a hobby on our tax returns for the money we have earned. However our shows have went from 3 the 1st year to about 12 so far this year. We are wanting to start selling shirts and other items along with the show and turn this into a business. I'm not sure what all the forms I need to fill out. I want to open a DBA account at my bank but they are requiring me to have a tax ID number. I live in the state of Oklahoma and I'm getting no help in my quest to create this business. Can you please give me some answers? I would appreciate any advice you have to offer.



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Old 04-27-2011, 02:09 PM
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“My husband and I have been doing sport bike stunt shows at town events for the past 3 years now. We have been listing it as a hobby on our tax returns for the money we have earned. However our shows have went from 3 the 1st year to about 12 so far this year. “---> As you know, If an activity, when the activity produces a loss ( as related expenses exceed income) is not for profit but is treated as a hobby activity, then losses from that activity may not be used to offset other income. In general, The IRS presumes that an activity is carried on for profit if it makes a profit during at least three of the last five tax years, including the current year. You may deduct ordinary and necessary expenses for conducting your business. An ordinary expense is an expense that is common and accepted in your business.
“We are wanting to start selling shirts and other items along with the show and turn this into a business. I'm not sure what all the forms I need to fill out. I want to open a DBA account at my bank but they are requiring me to have a tax ID number.”----> When beginning a business, you must decide what form of business entity to establish. Your form of business determines which income tax return form you have to file. The most common forms of business are the sole proprietorship, partnership, corporation, and S corporation; for example, in the case of sole proprietorship, a sole proprietor is someone who owns an unincorporated business by himself or herself. You, as sole proprietor can do business under you own name.You can also use a trade name. Like any other business, a sole proprietor must get any business permits or licenses the state and local governments require.However, a sole proprietor who does not have any employees and who does not file any excise or pension plan tax returns is the only business person who does not need an employer identification number." In this situation, you, as the Sole Proprietor, MAY use your SSN as the taxpayer identification number. You need to check the state and local laws where your business is located for licensing and permit requirements. Your sole proprietorship can have employees. Your spouse can also work for you on an occasional basis, and you don't have to formally hire him as an employee. A federal tax identification number, employer identification number, is a number assigned solely to your business by the IRS. As long as your business offering products or services that are taxed in any way, it must get a federal tax ID number. If your business is a corporation, including an LLC, or a partnership, you need a tax ID number.To set up a federal tax ID number (also called an Employer Identification Number, or EIN), contact your nearest Local IRS Field Office, or call the IRS Business and Specialty Tax Hotline at 800-829-4933.You can also apply online for an EIN via the IRS web site. The online application asks the questions, you provide the answers and, just like that, you get your EIN immediately. You can then download, save, and print your EIN confirmation notice.
Please visit the IRS Website here; Apply for an Employer Identification Number (EIN) Online



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