Just like any other business, you’re going to need to pay your taxes to the
government. This is a crucial part of your financial dealings that you want to
know about, though you may well hand over the chore to an accountant.

First of all, you will need to establish an EIN (employer identification
number). If it’s just you, then you will be using your social security number,
but if you end up with employees, then you will have to establish another.
You will need to file for an EIN if you pay wages to any number of
employees, if you file pension or excise tax returns, or if form a partnership
or corporation.

Since it may be just you that’s getting your paychecks, you’ll want to enlist
the help of a tax adviser to help you have enough for Uncle Sam as well.
You have to consider that you aren’t going to be getting a formal paycheck
with withholding amounts on it, so you may want to start your own method
of taking out those amounts—you’ll need it at tax time.

You may want to consider paying your taxes as you go throughout your year.
These can be paid in a quarterly fashion so as not to be one lump sum at the
end of the year. You can check with a tax adviser to see how this can be set
up, but it will help you determine what you need to pay based on what you
are making. A home business is not exempt from paying for Medicare, Social
Security, Federal, State, and City taxes. You will need to take care of all of
these.

In terms of sales taxes for selling products, you will need to do so if you are
selling new items. There is a resale exemption for those goods sold that
have already been taxed in their initial sale. You will need to apply for a
sales tax license in order to tax for goods. And do so, to not complete this
step is against the law for those that sell products.

There is a whole new ballgame if you employee someone to help you out.
You may want to enlist the aid of a payroll service to figure out all of the
withholdings and commissions for each employee, but while it is just you, it
helps to start saving up for taxes and figuring these into your cash flow
statements and projections.