Q: What type of tax filing option is best for my business?
I’m starting my own yoga business and trying to figure out how to do my taxes before launching. It’s not a traditional yoga studio or anything, it’s going to be primarily online (YouTube, email newsletter to subscribers, subscription sites that host yoga and fitness videos from various teachers) with in-person workshops/retreats (hosted around the world.) I’m currently based out of Colorado (just in case that makes a difference for taxes.)
I want it setup so that money from my business comes to me personally since business expenses will be coming from me personally, and I set aside money for taxes which I then pay later when filing taxes. It will be just me, and I won’t need a salary since I’ll earn whatever is left after setting aside taxes and covering business expenses.
I think that means I need a sole proprietorship? Does having yoga insurance make it unnecessary to file as LLC?
A: You should seek out a tax attorney to advise you. You're asking for legal advice and attorney's can't provide legal advise to people who are not their client.
A:
I suggest reviewing IRS Publication 334 for some basic information about tax requirements for small businesses. You can find it here: https://www.irs.gov/pub/irs-pdf/p334.pdf
The IRS also has this helpful page on starting a business with some basic rules and considerations: https://www.irs.gov/businesses/small-businesses-self-employed/starting-a-business
However, when you are dealing with matters like internet sales and retreats outside your home state (and especially outside the country), you can start encountering some very complex tax issues including allocating income among different states and countries, sales tax requirements, etc. I strongly suggest finding a local tax attorney and/or CPA with a lot of experience in multi-state retail practice and/or internet sales to help you set the business up correctly and to advise you, and aid you with your accounting, on an ongoing basis. The business plan that you are considering is one that involves some very complex tax and reporting requirements and considerations and I strongly recommend against trying to handle these on your own. This advice likely won't come cheap, but it is far less expensive than the cost of getting these things wrong.
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