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brewknowc

Taxes for Third Party CC handlers?

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Hi, I''m in the process of getting everything set up to sell my upcoming shareware online and was looking at a few third-party credit card handlers from the FAQ for this forum. Considering they handle all the payments and such, is it neccessary for me to get a tax ID number and register a business in order for me to legally sell my shareware through a company like this? (i am in ny, pretty standard tax laws)?? Thanks BC - Free Your Mind -

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I believe you can sell under your name, and just count that as income when paying your taxes (your social security number is the tax ID). Eventually you''d probably want to register as a business though.

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I think even if you register the business (file a DBA), if it''s a sole proprietorship (just you), you still include the sales on your individual tax return (not sure which schedule).

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Run some sales projections first. After estimated income is prepared, list all the deductions you would have as an individual, and then the ones you would have as a proprietor. Whatever gives you the best tax position is the way to go.

The thing to remember is that as a business entity, even a sole proprietor, you have more legal muscle, usually more deductions (I used to deduct things like the phone bill, water, coffee, milk, honey, desks, pens, paper, a percentage of your rent if you are working from home, lots of stuff you couldn''t do as an individual.)

It''s worth it, and, the perception is that if you went to the trouble to formalize your business legally, you can be extended more formal recognition and protection in other issues like Intellectual Property and so forth.

Now''s the time to cultivate a relationship with a business atty, and make sure you have good executive summary documentation to give him, indicating you''ve thought it all through. It''s a key first step.

HTH, and sell if ya gottem.

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