In our previous blog titled “Corporations” we reviewed the Corporation business structure. The next blog will review limited liability company (LLC). This blog is on Doing Business As (DBA).
Generally, a Doing Business As (DBA) is a business that is not registered with the IRS or State of Michigan.
At any time, you can start a business. You are able to establish the business as a DBA. The one negative of DBAs is no liability protection. This means the business is not separate from you personally. In other words, you and the business are one and in the same. This is a potential issue if you or your business is ever sued. Click here to learn more about separation of liability.
A DBA is reported on your personal 1040 tax return. The profits and losses of the business is entered on Schedule C.
Profits of the DBA are subject to both income tax and 15.3% self-employment tax. Most owners of DBA must pay quarterly estimated tax payments so they don’t get a large tax bill at the end of the year.