I have a Question

[dpricenator]

My wife just started a small business. She is a mobile culinary school for kids. So she comes to your kitchen and goes through recipes and techniques with young ones. She also uses does birthday parties where the kids make their own dishes. on to my question

In California...Does she needs to charge sales tax on the entire cost of the party. Most of the cost involved is her time. They are getting a meal out it, but technically it is being prepared by the kids, and cooked by my wife, in on oven at a restaurant we use as a venue.

I fyou care to check her website for an idea of what she does it is www.chefkidz.net It is still a work of progress.

 

[mav_sd]

Cool business. I bet it's tons of fun working with the kids!

As for your question... no clue... :dunno:

 

[sgresso]

Awesome Idea and I hope it all goes well for you guys.
She might want to ask a local business professor they may have the answer.

 

[jwintosh]

cool beans! don't know about the taxes...

 

[Moro]

So THAT's what it is! Excellent idea!

 

[stroke]

any kind of income the company sees will be taxed. What she gets for her time will then be counted as income, which will be taxed again if filed correctly. Your best bet is to get an accountant. Furthermore, you're better off going with a well-known accounting firm as opposed to an independant accountant. When my wife and her family started a business they had two bad accountants in a row who did not do their taxes correctly, thus costing them ~$6,000. You're better off going this route, as you'll probably be audited as a new business. It's a hard pill to swallow between paying the accountant and the taxes, but it's much better than all income being garnished retroactively.

 

[Clint]

A lot depends on the business structure. You should really be set up as a LLC, which limits any liability if some ***hole parent decides to sue your wife because their kid hurt themselves with a spoon that was "too sharp." (Laugh, but then take a look at some of the ridiculous lawsuits you see...Especially in these economic times)
It is my understanding that a LLC with only one member is considered by the Government as a Sole Proprietorship...This generally means that if she files separately, then the income from the company is combined with her income (if any). The nice thing is that many expenses that she incurs can be written off against her combined income. Depending on how “creative” she wants to be, this can significantly reduce her taxable income. (i.e. she goes to lunch with her friends, but her receipt shows that she went out with two potential clients….This can be written off. Gas, computers, office supplies…The list goes on) However, she MUST (must!) save these receipts, and note all of the creative details right away in case of an audit.
Note I am no expert, but I am in the process of redeveloping my owu business, and I am offering the best advice I can….Please check in with an accountant or your tax advisor to get the best understanding you can before making a decision!

Hope this helps, Bro

 

[stroke]

To piggyback, I believe an LLC is similar to an inc. But for sole proprietors. I want to say having an LLC limits the liability to the business itself and does not transfer to the owner or employees. Its a relatively new business structure and encourage sole proprietorship.
Posted via Mobile Device

 

[dpricenator]

Right right right. She will have to pay taxes on her income. But is the service she provides subject to CA STATE SALES TAX? Do we have to charge our clients 8.775% on the total?

not really sure what the percemtage is, cause I think it just changed recently.

 

[CWS]

To piggyback, I believe an LLC is similar to an inc. But for sole proprietors. I want to say having an LLC limits the liability to the business itself and does not transfer to the owner or employees. Its a relatively new business structure and encourage sole proprietorship.
Posted via Mobile Device

A LLC limits the liability to the ownership level of each member. Thus if only one member then they hold all the liability the same as a sole prop. Courts are quick to pierce the corporarte veil as it is called where all liability falls on the company and the individual stockholder are held without liability when there is only one stockholder or in the case of an LLC only one member.

Get a tax guy Dave. One suggestion is to call SCORE. Thier help is usually free and you get some top notch help. The guy I used to help set up my first company was the retired former CFO of Dole. Didnt charge a dime and gave great advice. As far as a big firm versus individuals, I have always used competent individuals as the big firms wee usually not interested in a business that only generated $15 million a year. Just get good references. Again, call SCORE.

 

[stroke]

They will charge taxes from your income. You do not have to charge sales tax, you can include sales tax in your prices, or you can add sales tax on at the end. It's entirely up to you how you charge, but they will take taxes out when you receive money for services rendered. Also, she will be taxed when she receives a pay check from the business and they business (here anyway) has to match it. That's right, Uncle Sam taxes the same money three times! Four really, because when you buy your supplies they're taxed also... crappy, isn't it?