Operating multiple types of business
Ok, so this is not STRICTLY tech startup related, but I am hoping that it will be of some interest here. If anyone thinks it doesn't belong here and maybe has a suggestion as to where I might ask (I can't figure out exactly how to Google this) then I'm open to suggestions.
I am in a position to leverage a couple of other skill sets (in addition to tech) to make a little more money and/or reduce my expenses further, allowing me to get to that "completely free" stage quicker. That's a great thing, but the problem is that the other two business are completely unrelated to tech AND unrelated to one another. I'm scattered, I know.
When I do the taxes, the IRS wants to know "what type of business am I running." That's easy for the tech work, and would be easy for either of the other two... but how on EARTH do you explain to them that your business involves multiple branches that are unrelated? If I claim three separate businesses I'll get hit with three times the taxes!
You can't say that you run 3 separate businesses when you have only one taxable entity, anyway. Are you incorporated, or sole proprietor? The business coding doesn't have to be perfect, which is good because there aren't really codes for e.g. SaaS anyway.
The best thing to do, of course, is to ask an accountant. If you're running 3 businesses and want to grow them, now is the time to find a good accountant… not after you mess something up terribly. Ask me how I know. (Although, tbf, I thought I had a good accountant and was wrong.)
Thanks for the reply. As you and @Skullclown mentioned, I've searched out the advice of an accountant (a good one!) and that has put my mind at ease. It seems to be as simple as three separate schedule forms... which will be more his headache than mine thank GOD.
I am a sole proprietor and in my current situation the odds are I'll stay that way for some time. That further simplifies the situation, so it looks like I was all worried about nothing much.
So ehh... how exactly do you KNOW that now rather than after I mess up is the time to find a good accountant? :)
I had an accountant (NOT just a tax preparer; someone I paid a LARGE monthly fee to) who didn't look at our books til the end of the year and left us with the biggest surprise you could possibly imagine, a surprise six-figure tax bill, and then while allegedly attempting to resolve this mess, filed for a deadline extension without my permission or even telling me, and then later when I wrote him just before the deadline to ask about the tax preparation, fired ME for being "unprofessional." I literally screamed outloud in the café I was in. Took years to resolve his fuckup.
Honestly I should have sued his ass but conveniently didn't have the money.
Good GOD that made my blood curdle just reading about it - the stuff of nightmares. I can only assume that you would not have been the only one he pulled this on. Only consolation I can possibly come up with is that it would be all but impossible to stay in business performing that sort of fuckery on your clients. I don't know what the penalties are for something like that but IMO that should put you under the jail. Sorry to read about this and I'm glad you recovered.
Thanks! I am very glad it's all in the past. I agree with you. Phew!
This question should be asked to an accountant in your local area.