There are so many people that say they have a business. Unfortunately for most, a business is not what they have. They work very hard, constantly in fact. Think of this visual: a blind man talking to his deaf son over a disconnected telephone. Now that’s a lot of work –for nothing. No matter how much work you do, if you aren’t getting paid for that work, then you do not have a business. You have a hobby.
Business income is any income that comes from any business activity; great examples are selling a service or product. A service is when you perform a task. A product is something tangible. Both can be sold in a business to create business income. Creating business income from these categories can come in different forms. As a service, you can give advice, teach, critique, etc… As a product, you can sell shoes, jewelry, cars, etc…
Is it just a hobby? Knowing whether you have an actual business or a hobby is the first step. What is the way that you make money from your business? Figure that out to solidify your business status. After you get those together, your next step will be knowing the type of business you have and how they are taxed. There are four main categories of businesses a sole proprietorship, a partnership, a limited liability company and corporation. I suggest going HERE to read up on how the IRS classifies each. I send you to the IRS because a lot of people have a lot of things to say about what type of business they have, however, the only say that matters is that of the IRS.
Do you need help identifying if you have a business and what kind of busy you have? Let’s have a conversation. It’s FREE. Tae@Youcanbook.me