Early in 07, I planned to form an LLC in Michigan,as a sole proprietor. I registered a DBA, and got a federal tax id, but that is all. Is it a business at this point, or do I need to submit articles of incorporation, to make it official? I formed it because I wanted to start a business renovating distressed homes as well as doing home staging and home improvements for others. I pulled out my 401k and purchased a vacant home at an auction and renovated it to kick off this business. If I put the money from the sale into a business checking, but then pull out money as needed for living expenses not related to the business, will I have to pay taxes on what I pull out of it, as it may be viewed as paying myself income? During this time, as far as my "real" job goes, I have lost income this year and my credit has gone from great to horrible and I fear that my creditors will sue. Would funds in a business acct be protected so I can continue?
to clarify...the funds put into the business aren't taxable, but if, for example, $300 per month were pulled out and not used for marketing/epenses, but instead, as living expenses, would they be treated as taxable income? If not, please explain why. Is if because it's a sole proprietorship, so it all washes out in the end?
The money from the sale was not profit, but what is left of my 401k that I pulled out to buy it with.
Orignal From: Help! It's tax time and I am need advice about my small business.?
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