What qualifies as a "business"?

[lavagal]

Re: What qualifies as a "business"?

I write free-lance stories. I have a GE Tax number. I invoice my clients for pay. I pay my taxes semiannually. I wonder what Adrian's volume is. I think all he'd need to do is invoice his customers/clients.

[hawaiigoodtogo]

Re: What qualifies as a "business"?

Hi,
I heard that a business operates under a profit of $600 don't need to pay taxes.
Anyway, if you do need to pay taxes, what I do is purchase items that can be itemized such as printers and computer stuff. Get your profit lower so you don't give uncle sam all a huge chunk.
As what is a good idea is to donate your services and items that can also be written off. There many ways to legally not pay too much at the end of the year.

Aloha,
Hawaiigoodtogo
"Get more exposure at HawaiieBiz.com"

[craigwatanabe]

Re: What qualifies as a "business"?

Hi,
I heard that a business operates under a profit of $600 don't need to pay taxes.
Anyway, if you do need to pay taxes, what I do is purchase items that can be itemized such as printers and computer stuff. Get your profit lower so you don't give uncle sam all a huge chunk.
As what is a good idea is to donate your services and items that can also be written off. There many ways to legally not pay too much at the end of the year.

Aloha,
Hawaiigoodtogo
"Get more exposure at HawaiieBiz.com"

I'm not sure about that but you may be right as the tax brackets may start above that mark. However you still need to report your earnings by completing a tax return.

I do understand that if you hire a contractor, if you paid him/her less than $600 you don't need to file a 1099. Anything above that you need to report. In your income tax filings you simply write that off as a business expense.

However when filing your GE taxes, make sure your wholesale and retail taxes are kept separate as your GE taxable consequence will be based on either revenue collected as accounts receivable.

[SouthKona]

Re: What qualifies as a "business"?

Another HTer's input:

You are still responsible for paying GE tax, even if you do not call yourself a "business". For example, if you rent out a room in a house you own, that income is reportable for GE purposes.

All you need to "be in business" in Hawaii a GE license, so that you can pay your GE taxes. You do not "have to have" a registered name, business cards, etc etc. All you just "have" to do is pay your taxes, including GE.

If you call yourself a business on your income taxes, and take deductions for expenses that amount to more than your income, you must show a profit for something like 3 out of 5 years or it will be considered a "hobby" and disallowed. In other words, don't think you can start up a business and lose money year after year after year and use that as a tax loss to offset earned income. (Note: 3 of 5 used to be the rule, it might be different now, but the same theory probably applies).

IT IS EASY to start a business in Hawaii. You can start small, make some money, and come out ahead. Don't be scared, just pay attention to the tax part as that is what will come back to bite you if you don't do it correctly.

Good luck.