On Good Morning Tampa Bay we've been telling you about ways to find good side jobs and how to make some extra cash.
Now, we're looking at how to stay above board and keep it all legal.
I spoke to a financial expert at Insurawealth who told me:
IF YOU MAKE MONEY THEN YOU NEED TO REPORT IT
If you make a profit, make sure the IRS knows about it. They've created a guideline to determine whether an activity is a legitimate business or a hobby. Click here to see those guidelines.
EVALUATE THE RISKS
Our expert says to make sure you're not undertaking something that will just cost you your time and not give you a return. Know the start-up costs before you fork it over.
If things are trending up from month to month or even year to year you should strongly consider proceeding with getting the business registered.
An important resources for you:
Experts always recommend that you track your expenses and income as closely as possible. Depending on your credit score, it's encouraged that you get a new credit card and use it specifically for the new venture. Free software, like that from Wave, tracks and categorizes those expenses.
Steps if you're looking to get the business registered:
- Registration of the company. In Florida: you can set up via https://dos.myflorida.com/sunbiz/
- Service Contacts / Terms & Conditions|Etc. (Example: The document will explain what services will be provided, how payment will be addressed, etc.)
- Contact a CPA. Getting the accounting set up correctly from the start will save you a bunch down the road.
- Once the business is approved, open up a business checking account.
- Keep all personal and business transactions separate. It makes life a whole lot easier. (Resource: IRS' Deducting Business Expenses)