Question by Legendary: Questions about running your own business and taxes.?
I run my own business, but it is not registered with the state yet. When I do my taxes, can I still write off my expenses? Also, what are the pros and cons of having a business registered? It is an online business.
Best answer:
Answer by danweber1997
Yes, you can still write off you expenses. You do not need to have a corporation or a partnership for it to be a valid, legitimate business. Per the US IRS, an activity qualifies as a business if your primary purpose for engaging in the activity is for income or profit and you are involved in the activity with continuity and regularity.
If you have not formed a corporation or setup a partnetship, then chances are that your business is considered a sole propietorship. You business income and expenses are report on Schedule C.
The pros of having the business registered is that it gives the business more legitimatacy and appearance of permanance. You do not, however, have to have it registered for it to be a valid, real business.
An excellent reference is IRS publication 334 – Tax Guide for Small Business
http://www.irs.gov/publications/p334/index.html
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