Sole Proprietorships – Purchase four Business Certificates (DBA forms) for forms with notarized signature should be files with the County Clerk’s Office.

Partnership – Purchase four Business Certificates for a partnership at any business or legal stationary store. Completed forms with notarized signatures should be filed with the County Clerks office.

Corporation – Forms to incorporate are available at any business or legal stationary store and should be filed with the Secretary of State in Albany. It is advisable to have a lawyer prepare and file the necessary documentation for you. Consider a Chapter “S” Corporation.

1. Sale Tax I.D. Number – Contact the New York State Department of Taxation and Finance (1-800-462-8100) and ask for a State Tax Kit.
2. Permits and Licenses required in New York State – Contact The Office of Business Permits and Regulatory Assistance (OBPRA) (1-800-3423464) And ask for a Permit Assistance Kit.
3. Federal Taxes and Federal Employer Identification Number (EIN) if you are forming a corporation or a partnership, or if you plan to hire employees you must file for an EIN (IRS form SS-4). If you are a sole – proprietorship with no employees you may use your own social security number on federal tax forms. Stop at your local IRS office or call 1-800-829-1040 for appropriate paperwork.
4. Local Licenses and Permits – Contact City Hall (851-4955) Advise that you will be doing business in Buffalo and what are the requirements. If you plan to operate a business in your home you must also check to be sure you are not in violation of the local zoning ordinance.
5. Open a business checking account – Maintain a business Checking account separate from you’re your personnel account. The bank will require a stamped business certificate or a copy of your DBA or incorporation papers with your corporate seal affixed.
6. Arrange for a business phone line to be installed – In most cases a deposit will charge. By doing this you will also be entitled to a business listing in the Yellow Pages. If someone is not available to answer the phone consider an answering service or at least an answering machine. Remember to check out the cost of all your utilities deposits.
7. Produce a business plan to outline your business goals and Objectives. Describe what will be necessary to accomplish them. Major components of the plan should at least include the following:

• Business Description and objectives – should be Quantifiable such as: money in sales, number of clients, and percent of market.
• Marketing Plan – Target Market, advertising, public Relations, competition analysis (strengths and weaknesses).
• Personnel –Resumes of all key people, job descriptions.
• Financial Information – Start-up costs, cash flow projections.

Keep operating cash as a “cash cushion’ on hand for Emergencies. Enough reserves for three to six months worth of expenses should be sufficient.

*Send announcements of your business Start-up to the media, potential customers and to your friends.

1. 1. Purchase of “Certificate of Business”
   “Business Certificate for sole proprietor”- owned by one person OR
   “Business Certificate for Partners” – for more than one owner.
   These forms are available at legal stationery or office supply stores such as Paper Cutter, Paper Factory, Office Max, etc.
2. It will be necessary to purchase and complete three (3) forms. It is Suggested that forms be notarized before going to clerk’s office. (Notaries are available in all banks)
3. File the original with the County Clerk who, on request, will certify The other two copies. One copy is used for a business bank account and the other for your business records. Extra copies can be obtained later, if needed.
4. Filing fees are as follow: original form - $25.00 Certified copies - CHECK WITH YOUR COUNTY CLERK.

1. Sole Proprietor - Federal – form 1040, Sch C, and Sch SE NYS – IT 201, Plus copy of Sch C from Federal return.
2. Partnerships: Federal – Form 1120, W-2 and/or 1065, Sch K – 1 to form 1040 NYS – IT 204, attach Federal Form 1065, Sch K – 1’s and all other supporting documents.
3. Corporation: Federal - Form 1120, W-2 and/or 1099 Div to Form 1040 NYS – FORM CT 3 OR CT 4.
4. S Corporation: Federal – Form 1120S, W – 2 and/or Sch K – 1 to form 1040 NYS –Form CT 3S or CT 4S.

1. Sole Proprietor – Required when: hiring employees; withholding Federal Income taxes on non-wage income to a nonresident alien; have a filing requirement for alcohol, tobacco, firearm or Keogh plan.
2. Partnership – required
3. Corporation – required
4. S Corporation – required
5. LLC – depends on how entity is taxed; LLP – require

Sales of tangible personal property and some services are subject to NYS Sales Tax.

Taxable services include: repairing property, landscaping, painting, general repairs of real property, faxing service, sale of a pet, video taping, cleaning or maintenance services, sale of food or drink in or by a restaurant. Those who provide Internet services should contact NYS Sales Tax at 1-800-972-1233 for the taxable consequences of their particular service.

You cannot legally begin to do business until you receive your certificate of authority.

You must use the accrual method of accounting in collecting and paying sales tax.


Due Dates for filing Quarterly Returns:     

After filing four quarterly returns, first time vendors who collect less than $3000 in sales tax for the tear will be given the option to file an annual return. New York State will notify you if you qualify for this option.

The dollar amount of taxable sales and the amount of sales tax charged must be stated separately on each invoice. 
You cannot compute sales tax on each item separately. Ring up all of the taxable items per customer.
You must keep your records for a minimum of three years from the due date of the return (or date filed whichever is later).

• Sole proprietors, partnerships, and corporations can deduct ordinary and necessary expenses paid or incurred during the tax year in carrying on any trade or business. The mere fact that an expense was paid or incurred in carrying on a trade or business doesn’t entitle you to a deduction. A deductible expense must be an ordinary and necessary expense of carrying on your trade or business.
• An ordinary expense is one, which is customary or usual. This does not mean customary or usual within your experience, but rather, customary or usual within the experience of a particular trade, industry or community. Therefore, it is possible for an expense to qualify as ordinary even though it is the first and only time that you incur it. An expense is ordinary if it’s customary or usual in your business, but an unusual expense may be ordinary if it is reasonably related to your trade or business.
• A necessary expense is one that is appropriate and helpful, rather than necessarily essential to your business. Usually, your judgment as to what is a necessary expenditure in your trade or business will be acceptable. A necessary expense is one that is appropriate and helpful in developing and maintaining your business. It need not be essential or indispensable.
• Certain courts have held that an expense must not only be ordinary and necessary in order to be deductible, but that it must also be reasonable in amount and reasonable in relation to its purpose.

• Expenditures are deductible as ordinary and necessary even though they turn out to have been unwise.

Gross Business Income includes all taxable income from whatever source derived. For a business, this consists of the total gross receipts, including the receipt of property as well as money. In the course of your business, if you perform work under a contract that allows you to remove and keep certain used equipment, its fair market value is included in your gross business income.

Gross Business Income also can include interest, rents, royalties, and dividends. Barter is the swapping of goods and services. It is taxable to each party involved in the swap to the extent of the fair market value of the goods or services received. Thus, a business that accepts goods and services from clients in exchange for the businesses services has to include the goods and services in income at the normal retail price, not at a discounted value based on the clients’ inability to pay cash.

Here’s an example of a bartering transaction that produces gross income:
ILLUSTRATION: A lawyer performed personal legal services for a house painter, in return the painter painted the lawyer’s home. The lawyer and painter must each include in income the fair market value of the services received from the other

REMEMBER - All of the deductions listed are subject to restrictions as to when, how, and if they can be taken! Follow these general guidelines:

• ORDINARY
• NECESSARY
• REASONABLE
• CONNECTED TO YOUR TRADE OR BUSINESS

PROVE EACH DEDUCTION BY KEEPING ALL RECEIPTS FOR EACH TRANSACTION:

Accounting / Advertising / Amortization / Bad Debts / Business / Gifts / Car & Truck / Commissions / Dues / Educational / Expenses / Electricity / Employee Pension Plans / Employee Benefit Plans / Entertainment / Excise Taxes / Fees / Franchise Payments / Heat / Home / Import Duties / Interest / Inventory / Legal / Licenses / Machinery / Mailing / Maintenance / Meals / Office Furniture / Office Equipment / Office Supplies / Rent, Utilities, Repairs / Repayment / Royalty Payments / Subscriptions / Tax Preparation Fees / Taxes / Telephone / Travel

• keep business records (written or computer) without supporting documents, such as invoices, receipts, etc. Be able to support those entries. Show the world those entries didn’t come from thin air!
• Write a check to an individual without other supporting documentation. As far as the IRS knows, that check could be for your Aunt Tillie’s small dog’s new 14K gold stud collar you’ve been promising her for the last 10 years.
• Think there’s an allowable magic business percentage for business use of a car. It just doesn’t exist.
• Wait to write business records two years from when they occurred. It’s really hard to remember from one year to the next. Your mind is fresh when you do it in the current year on a regular basis.
• Try to live off tax money (payroll and/or sales tax).

Do

• Keep a separate bank account for your business expenses.
• Get a banking service that gives you the cancelled checks.
• Keep the statements that show your credit card business purchases. The credit card bill will not work alone.
• Keep an accurate record of business mileage whether you use the standard mileage rate or actual expenses.
• Keep the odometer reading from your car or truck used for business along with your record log.
• Keep business contacts as supporting documents (especially when using or receiving cash).