my del.icio.usAsk the Expert: Starting up a Blog and selling ad space, so do I need to incorporate?
QUESTION:
My blog is now starting to get a wider readership, and I’d like to start selling ad space on it. How do I go about doing this? Do I need to set up a sole proprietorship?
ANSWER:
You will want to first consider if you need to set up a separate corporate entity or if you are fine as a sole proprietor. With a separate entity like a S-corporation, a C-corporation, or an LLC, you have some level of personal protection for your assets (such as your house). If you are a sole proprietor, the business money is your money, and in the unfortunate event that you get sued, your personal assets may be considered as part of the suit.
Most types of business setups may take advantage of tax deductions: it is good to consult with a tax advisor or enrolled agent to get more feedback on how to set up your business. We recommend Sterling Tax Service www.roanna.com and Roanna Biedenweg.
If you are setting up a sole proprietorship, the typical process is to:
1) apply for a business license from your county. You may usually find your local county website and find “Doing Business in…” or “Information for Businesses” to get a copy of the business license application.
2) if you’re doing business as a different name from yourself (e.g. Maria’s Computers vs. Maria Gomez), you’ll apply for a DBA (doing business as), which is another application from your county. You’ll also probably need to advertise in the local paper for a set period of time. The DBA allows there to be a public record of who is actually the owner of a particular business.
3) If you’re setting up a bank account, you may either take your business license and DBA to the bank and set up a bank account with that fictitious business name, -or- you set up a different share off your existing bank account to keep track of self-employment income that gets paid to you personally.
4) Track your income and expenditures from your endeavor and declare them separately as self-employment income during tax time. For a blog, typical expenses would include web domain names, hosting, graphic design, web design, data entry costs, as well as any research-related costs, magazine subscriptions in that blog field, your computer, and a portion of utilities such as phone line, internet service, and electricity.
5) For more information, I recommend you do research with your county and also consult the Nolo website www.nolo.com for more research. Your local chapter of SCORE www.score.org will also have business advisors to guide you.
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