Selling band music online - LLC or EID/Federal Tax ID number?

[initialsBB]

I don't think you need a tax ID unless you're going to be paying other people. If you want to get a bank account that can accept checks made out to "chiimba records" or whatever, then you can just create a DBA. I think you could set up a DBA as a partnership so that you and your brother are both owners.

[chiimba]

Originally Posted by initialsBB

I don't think you need a tax ID unless you're going to be paying other people. If you want to get a bank account that can accept checks made out to "chiimba records" or whatever, then you can just create a DBA. I think you could set up a DBA as a partnership so that you and your brother are both owners.

Thanks for the reply.

DBA as in "doing business as"? Wouldn't I essentially be setting up / filing a business then?

I may just talk to my bank and an accountant to get advice.

I was originally planning on just putting the business in my name as an LLC and paying out my brother a % of sales (maybe via written contract); because making him a partner is just not worth it at this point since this business stuff is all over his young head and he seems very content with just being a drummer and letting me deal with the boring/tedious/less enjoyable side of things.

My cousin in Nashville owns his own small record label and sells through IODA. Looking at our last texts he told me i need a business license & bank account and federal tax ID # so I think I might just go that route. I'd probably have to do it eventualy so might as well get it over with.

[sventvkg]

Dude...you don't need anything to sell through itunes etc...Just get tunecore/cdbaby etc and get it up there..

[AwwDeOhh]

Go to your County Clerk. They'll be able to answer alot of your questions (which are mostly area specific), you'll be able to get your DBA papers there as well (you need those in order before opening a DBA bank account.. though the whole process sounds more complex than it really is).

As of current (AFAIK) there's only a small handfull of states that you need to keep track of online sales taxes (NJ, Illinois , + a couple others, i think Cali just adopted this.. though there will probably be more to come...)

Personal income tax, otoh, you do need to keep track of. And that's where your Federal Tax ID comes into play (as you'll need it to file as self employed)

[initialsBB]

Originally Posted by chiimba

DBA as in "doing business as"? Wouldn't I essentially be setting up / filing a business then?

Yes, it's a "business" but as a legal entity it's just you. So Chiimba Smith is "doing business as" Chiimba Records for example. Your taxes and everything would stay the same but it basically just means that you can legally use a fictitious name to do things like accept checks. It's the simplest thing to set up. It doesn't limit your liability in any way, so if somebody sues "Chiimba Records" they can go after your personal assets rather than just the company's assets.

Originally Posted by chiimba

I was originally planning on just putting the business in my name as an LLC and paying out my brother a % of sales (maybe via written contract);

That gets a little more complicated and then you probably do need an EIN.

Originally Posted by chiimba

I'd probably have to do it eventualy so might as well get it over with.

Sounds like a plan.

Originally Posted by AwwDeOhh

Personal income tax, otoh, you do need to keep track of. And that's where your Federal Tax ID comes into play (as you'll need it to file as self employed)

You don't need an EIN just for being self-employed though. Only if you're an employer. So he'll need one if he's paying his brother in a formal way, but as far as I know he wouldn't need one if he set it up as a partnership and they just each took what they needed from the bank account. Or he could just pay him under the table.