Advice: Creating your own business in MD

When I first formed my business in 2013, I first searched throughout businesses in Maryland to make sure no one else had my business name. I had already bought a URL that I thought was nifty, so I decided to make that my business name. Luckily, the only other company that sounded similar was focused on innovative tech -- not associated with anything too bad, didn't sound like amy naughty words in other languages, etc. 

All you need for registration of an LLC in Maryland is an Articles of Organization and a Maryland residence. It's surprisingly easy. I formed my business in Baltimore, since that's where we were living at the time, and I had the address as my home address. I had to submit a form called the "Articles of Organization." (If you have any partnerships, it's also good to have a formal partnership agreement to formalize your business structure, but that's usually for legal purposes.) I decided to form an LLC since it's just me, and I wanted limited liability (to protect my personal assets). I then went to the State of Maryland Department of Assessments and Taxation, asked for an "Expedited Service Request Form" so that I could get my paperwork the same day, and received a "Corporate Charter Approval Sheet". (The overall cost was fairly cheap, I think. The City of Baltimore will send me a renewal form each year, at which time I can choose to renew the business name, make any changes to contact info/address, or let the name/license expire. I need to double-check the fees for this year.) 

After a few days of filing for my business license/registering it with Baltimore, I got a letter from EFTPS with my Employer-Identification-Number. Once I got this EIN, I could open up a bank account for checking, savings, and a business credit card. 

According to a friend: "As for taxes, each member of the LLC would pay taxes on their % of profits on their own personal income tax returns. You only need to send out a W2 form to an employee if they worked in the past year (in an S corp you would have to have a W2 form for yourself). You might also want to look into 1099 forms for independent contractors." 

We currently use Turbo Tax for preparing our family tax returns, and because I'm the sole employer/employee of my small business, it counts as my income. I do have a contractor, so I keep track of my payments using QuickBooks, which helps me automatically generate a 1099 for my contractor and estimates/invoices for my clients. 

Some tips:
- I think that MD now has an online service for helping to start small businesses:
I haven't been through all of it, but it looks pretty useful!

- Keep track of all of your expenses! Especially if you account for them on your taxes -- things like mileage, business dinners, (the size of your home office divided by the size of your home times your utility bills)... I keep a "daily log" so that if I were to get audited, I have a record of all of my purchases. The daily log is currently a Google spreadsheet, so that I can access it at any time. :) I also recommend using QuickBooks and TurboTax.

- If you work for the government, email your Ethics Officer to make sure there aren't any potential conflicts. She'll walk you through which forms to fill out. I had to fill out an HH520 form, and take the usual ethics online courses. 

Good luck, business folks!

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