Easy Guide to Direct Selling - Getting Started doc

Easy Guide to Direct Selling $$$ -
Getting Started!
Joanie Clarke
Easy Guide to Direct Selling – Getting Started
Joanie Clarke
Copyright 2012 by Joanie Clarke
Smashwords Edition
All rights reserved.
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DEDICATION
This book is dedicated to my readers. You are starting an
adventure!
My advice? Have fun and move at your own pace. Make small
investments and build from there. Don’t take yourself too seriously
and…Go for it!
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CONTENTS
Acknowledgments
It’s All About You
Attitude is Everything
Inspiration – Real Life
What is Direct Selling?
Should You Become a Direct Seller?
What Will I Sell?
How Will I Do It?
Business Structure
Questions and Answers
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ACKNOWLEDGMENTS
Thanks to my children for their love and support. They kept me
going through the hardest times of my life and we are all now

enjoying the fruits of that labor.
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1 It’s All About You
You’re reading this book for a reason! Whether you’ve:
• Always wanted to be in business for yourself;
• Just want to make a few hundred extra dollars a week to
help pay the bills;
• Tried before and quit and want to know how to succeed
this time.
Regardless of what motivated you to read these pages, the
important fact is that that you are reading it! By reading this book
you are saying to yourself (and maybe to others) that YOU want to
stop talking and dreaming about making money in your own
business and start DOING something about it!!
Remember, nothing happens unless you take the first step! And
that, my friends, is why I wrote this book. It is written for YOU,
for the ones who are ready to take the plunge. And this powerful
little book can lead you to where you need to be to have that
success you’ve always wanted in your own business.
I am a 40+ year old woman who had worked most of my life for
others. I thought about starting my own business many times but
life just seemed to get in the way. I’ll bet many of you know
exactly what I’m talking about. I tried a number of part-time
opportunities unsuccessfully. Even though I had not succeeded I
knew way down deep inside that I had it in me to be successful. I
wanted badly to be my own boss and I believed I could make it on
my own if I tried and just didn’t quit.
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Oops! Did I use the “Q” word? You know, the word, “QUIT”. To
be successful in your own business you have to know that quitting

is NOT an option. You must know that you WILL make mistakes,
some like to call it a ‘FAILURE’; you know, the ‘F’ word! But,
mistakes are GOING TO HAPPEN!. That’s OK because failure is
nothing more than another way NOT to do something.
To be successful you must take failure in stride so you learn from
mistakes, or failures if you like, and just don’t make the same
mistake twice, if you can help it. You have to take the mindset that
failure is just the other side of success! Just don’t QUIT! Don’t let
making mistakes (Failure) get the best of you. It’s really not
personal, it’s just another way not to do something. Just ask
Thomas Edison, the inventor of the electric light bulb, and I might
add, later to become the founder of General Electric Co. Perhaps
you’ve heard of him!
When Thomas Edison was interviewed by a young reporter who
boldly asked Mr. Edison if he felt like a failure and if he thought
he should just give up by now. Perplexed, Edison replied, "Young
man, why would I feel like a failure? And why would I ever give
up? I now know definitively over 9,000 ways that an electric light
bulb will not work. Success is almost in my grasp." And shortly
after that, and over 10,000 attempts, Edison invented the light
bulb! Thomas Edison had the right attitude. Although he failed
over 10,000 times he did not take the mistakes as personal. He
knew he would succeed and he did!
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2 Attitude is Everything
My mother told me when I was very young that, “Attitude is
Everything”. And I thought, “OK, sure mom, whatever you say”,
and I blew it off. I didn’t have a clue what she meant. And it took
me until I was nearly 30 years old before I realized how wise my
mother really was.

Attitude is Everything! Another way of saying this is YOU MUST
KEEP A POSITIVE ATTITUDE!
Believe this for most people keeping a positive attitude is VERY
DIFFICULT. It’s true! That said, if you want to be successful, and
REALLY MEAN IT down in your gut, you MUST LEARN HOW
TO KEEP A POSITIVE ATTITUDE.
Have you ever heard the phrase “fake it ‘till you make it”?
Sometimes you do have to “fake it ‘till you make it”! I don’t mean
ignore reality and get in over your head on a project. I mean feel in
your gut that you are already successful!
There are lots of methods you can use to help you to keep a
positive attitude. One of the best for me is a technique I call my
‘Merry Christmas Attitude’. I bring up in an instant a specific
memory I had from a past Christmas that was good, positive, and
without any phoniness. The emotion I had experienced at that time
in the past was very real and I bring it back up and use it to
overcome negativity. I can instantly get my positive attitude where
I felt great and, regain my confidence. With my Merry Christmas
Attitude, I know I will be OK.
It was a bit slow for me to bring up that memory when I first began
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trying it. But now I can go there in an instant, and that quickly my
negative thinking is gone. I can get right back on the right track
instantly.
It’s a great technique, because it is not artificial. It is not
superimposing emotion because the emotion is real and valid. You
might want to try this technique for yourself. Remember, it is very
important that the memory be valid. You must have really
experienced that feeling of ‘everything is just great’ and meant it.
This is important because you are going to use that memory to

revisit every time you feel your attitude dropping and you are
getting into a state of negativity, of ‘woe is me’, of ‘I can’t do
this’. If you do experience times when you are feeling in a
hopeless situation and don’t know what to do or where to turn, just
bring up your own ‘Merry Christmas Attitude’ and it will help you
get back on track and in control.
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3 Inspiration – Real Life
So, you’ve decided you want to be your own boss and to get
started making money on your own. Although I commend you on
your decision, please understand this decision doesn’t mean you
quit your day job (your current primary means of employment) but
that you will dedicate the time it takes to succeed in this new
venture of being your own boss in your own business!
Take slow steps initially, be patient, be positive. This is a
tremendous learning experience for you. With the right attitude
you will succeed, slowly at first, but, in all reality, the sky’s the
limit!
There are numerous examples of young men and women, some of
whom never graduated high school, and others who dropped out of
college to work their dream, who have become multi-millionaires,
in some cases billionaires, because they didn’t quit and kept their
positive attitude.
Here are a few examples:
• Richard Branson of Virgin Airlines and Virgin Records,
and a multi-billionaire, dropped out of school at 16.
• Bill Gates of Microsoft dropped out of college at 20.
• Mark Zuckerberg dropped out of college at 19.
Please don’t get me wrong, I am not encouraging you to drop out
of school. I’m simply giving examples of young and not-so-young

men who kept the positive attitude and didn’t quit.
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4 What is Direct Selling?
Enough of the pep talk. It’s time to start your own business! Oh,
Wow! Now it’s getting real. You actually have to really think
about what you want to do, (if you don’t know what that is
already).
The first thing is to decide what are you going to sell or what
service you will perform. Remember also, that you will probably
be working from your home. Consider that when making decisions
about products to sell!
You know to become successful as your own boss you have to be
able to sell something to someone whether it be a product or
service. How else are you going to bring in the cash?
Now let’s talk about direct selling. Direct selling is independent,
personal sales. There’s no fixed location. Just you selling naturally
to the people with whom you are in direct contact and to whom
you provide both individual and group demonstrations. There are
many titles you can call yourself; independent sales representative,
sales consultant, distributor. No matter the title that you use, when
you are a direct seller, you are your own boss. You are CEO. You
own your own company! Isn’t that cool?
Just about any product or service can be and is being purchased
through direct selling somewhere in the world. Direct selling is a
global business, and believe this, it represents over 32 billion
dollars a year in sales! There are many well established companies
that use the direct selling method of distribution. Cosmetics,
wellness products and home products are often sold through direct
sales.
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With the Internet, there are many direct sellers that skip company
specific affiliation altogether. They buy direct from wholesalers or
manufacturers and sell to a worldwide audience.
If you’re thinking about direct selling as an income source
yourself, you are not alone! Millions of Americans have turned to
direct selling for part-time income or as a full-time career. Some
use direct selling to earn just a little extra money for essentials
such as unexpected medical bills or to pay off a credit card. Some
use direct selling to earn money for a new car or a family vacation.
Some people use direct selling as their primary, career income.
Direct sellers often find unexpected benefits from their decision to
become a direct seller. Direct selling is perhaps the best
entrepreneurial skill building opportunity in the world. There is no
limit to the income potential with direct selling. It is NOT “easy
income,” you will NOT “get rich quick”. The secret to direct
selling success is a four-letter word: WORK!
The work involved and the reward are tied to one another. Work a
little bit and make a little money. Work a little more and make
more money. Work full time and the sky's the limit!
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5 Should you become a direct seller?
Whatever your goal, if you set achievable goals for day-to-day
activity for your business, and if you consistently achieve those
daily goals, you will have a thriving income from direct selling.
Direct selling offers an equal opportunity for everyone, regardless
of age, sex, race, religion or level of education. Women earn dollar
for dollar the same as men.
If you can answer “yes” to the following statements, direct selling
might be for you!
Reasons to Become a Direct Seller

• I want to earn extra income
• I want to buy products at wholesale
• I want to build a strong, secure, high income future with no
limits on my income
• I want to meet more people
• I want the tax advantages of business ownership
Once you decide that you want to sell direct to consumers, the next
consideration is to choose between using an established direct
selling organization or to be your own distributor.
Do an Internet search today and you will get pages and pages of
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information on direct selling companies. There are direct selling
companies offering products for almost every consumer product or
services.
Distributor for an Established Company
If you are new to direct selling, working with a company with an
existing structure may be the best way to get started. Choose a
product or service that you already use yourself. If you use and
believe in the product, you will be a much more effective sales
person!
One way is to sign up for a distributorship. With this model, you
sign-up to become a distributor of a successful, known company’s
products or services (like Mary Kay Cosmetics, Primerica
Financial Services, or Avon).
These Distributorships have a relatively low entry fee but do
involve a lot of work learning the business model. Be aware that
the company you represent and that the margin (profit) you will
realize is LESS THAN you can get on your own. The good news is
these types of Distributorships already know exactly how you
should sell their product and can teach that to you, if that’s what

you want.
Be Your Own Distributor
Another way is to be your own Distributor by buying products
from a wholesale supplier and selling them yourself to your
customers. If you really want to be your own boss, being your own
distributor is the most profitable method! Start with family and
friends and acquaintances often called your ‘warm market’. If you
go this route it is best to have a branded product that is
recognizable to many people. I started my business as my own
Distributor selling already branded products, like the Hitachi
Magic Wand. If you’ve got some entrepreneurial experience,
creating your direct selling business on you own will bring you the
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most ROI (return on your investment).
Franchise
Another way is to buy in to a franchise. A Franchise is where you
buy the right to use the name and business process of a big,
hopefully successful, company. (like Subway, Papa John’s Pizza,
or Merry Maid). Unless you already have a very large stash of
cash a Franchise is not going to be in your crystal ball yet.
Self-Made Product Distribution
Yet another way is Self-Made Products and/or personal services.
For example, if you are good at Crafts, you can make and sell your
crafts to your ‘warm market’ to start. You may also want to sell
your crafts on eBay or other web sites known for crafts like Etsy.
Perhaps you are very good at something. Maybe you have a hobby
of making something, and maybe others have said you ought to be
selling this to the public. That’s a great way to start! Sell items you
make yourself. Or, you may have some talent that can be
capitalized upon. A talent with commercial viability, meaning

someone you don’t know would want to buy it from you.
A limitation to this method is that you are the business. You only
have so much time to produce a product or perform the service!
Real Examples
I know of a school teacher with a love for basketball. He is tall and
plays regularly with friends on a local outdoor court. He’d been
thinking of starting a summer basketball camp for young boys and
girls (yes, girls do play basketball). He thought about it for quite a
while, but finally he did start a summer basketball camp for young
boys and girls. He worked in conjunction with the school
community program manager and was able to get financial support
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from the school system. That’s a good example of someone with a
skill set used for fun that was turned into an income stream. By the
way he’s still doing it. Very successfully.
Another teacher I know was able to use his love of teaching and
his skill with people to begin a tutoring business he did in evenings
and on Saturday.
Another person I know loved the piano and was an exceptional
piano player. It was her hobby. She began offering piano lessons to
young kids and now has a lucrative small business as a piano
teacher.
I know of a number of potters who love working with their hands,
especially making ceramic pottery. One in particular also had a
good eye for color and design. He had already accumulated an
abundance of ceramic dishes and vases that were all over his
home. He had no place left to put anything. So, he began going to
craft fairs, set up a booth and sold his ceramic items to the public.
Now, not only does he make money selling what he creates, he
also teaches pottery classes.

I didn’t have a particular talent to sell as a service or a product, but
I did have a skill at sales. I’m good at talking with people. I also
have a good head for business. I know that to sell a product
successfully I have to buy at a low price so that I can sell the
product at a fair price to the customer and still make a good return
on my investment.
That’s the model that works for me. I am my own Distributor of
products. I identify products that are in demand. I find a source
through a distributor or (better) I go factory direct and I sell to
consumers.
Whatever model you choose, get started now!
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6 What Will I Sell?
If you are like me and you do not have any hobby or special skill
at making anything, you need to find a product that is reasonably
affordable at retail to your customers. This, of course, depends on
where you live and what your customers are willing to pay. It also
depends, somewhat, on your age and the age of the individuals you
want as customers.
You may already have some great ideas. You can always skim
through magazines so see what’s hot and what’s not. But
remember, your initial venture in your own business should be
simple. Have you ever heard of the KISS model? (That’s Keep It
Simple Stupid!) Whatever product you decide upon should not
take a lot of demonstration time, if any.
Keep it simple. Your customer should be able to see immediately
what your product does or how to use it. It should not be heavy
and cumbersome, and should not be large. You are going to be
storing your inventory at your home. You should be able to buy
your inventory cheap enough so that you can sell it at a discount to

your customers and still put a good bit of cash in your pocket (after
paying for the cost of the product, shipping and any other charges).
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7 How Do I Do It?
At the beginning, keep it very, very simple. Sell stuff. Make
money.
There will be lots of decisions to make once you get some success
under your belt, but the hardest part is beginning. Jump in! I sold
to my warm market and listed on established Internet sites. I
started small and reinvested my profits in more inventory. I then
diversified into more than one product. I bought the products as
inexpensively as I could at the time, mostly through distributors. I
buy exclusively direct from the manufacturer now – and I make a
better margin now while giving my customers a better price too!
Cash Flow
Do not confuse cash flow with profit! Profit is the selling price
minus your cost (that means your total cost; which is your direct
cost of the product, shipping, packaging, seller fees if you are
using an Internet seller, credit card merchant fees and online
payment fees (like PayPal). Cash flow is nothing more that the
cash available to you at a given time. At any given time, you may
have a lot of money in the bank from sales made, and later your
fees come due. Be sure you have money on hand to pay all your
obligations. But remember - cash flow is not profit!
A lot of businesses work on cash flow and sometimes they are
scrambling to bring in more cash flow. That is usually because
they have a flaw in their business model. They’ve priced their
product too low and are not covering their costs. The bottom line is
what is important and they are not watching the bottom line!
FEIN (EIN) and Sales Tax Numbers

Pretty quickly, you will want to establish these two numbers. Your
Federal Employer Identification Number (FEIN, otherwise known
as EIN) is like your social security number for a person. The EIN
is a specific identifier of a business. Don’t let the word ‘employer’
in the name scare you.
Your sales tax number has a two-fold purpose. It is required by
most States if you retail to the public. Your suppliers or vendors
will usually require a copy of your Sales Tax Resale Certificate to
prove that you are a wholesaler or a direct seller.
By the way, there are only five states that do NOT have sales tax.
They are: Alaska, Delaware, Montana, New Hampshire and
Oregon. But some states, like Delaware, do have a gross receipts
tax on businesses. Check with your state and your local county for
the rules in your area.
Purchasing
If you are selling a product everything depends on your purchase
price. You have to be able to buy your product cheap, cheap,
cheap. Your purchase price drives your whole business!
You will use your Sales Tax Number to purchase wholesale.
A word to the wise: Do not run out of product once you’ve
established a customer base. But, that said, if you are fortunate
enough to have found a product that you can buy cheap enough so
you can offer it at a discount to your customers and still put a good
bit of $$ in your pocket you are doing just fine. Be sure to check
with your supplier so you will know if he/she is able to keep you
stocked with merchandise. Also determine how quickly your
supplier can ship after you order. You will know when you will
receive your order and can gauge your minimum stocking levels.
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Let your supplier keep the huge inventory and you order ‘just in

time’. That way you keep buying more merchandise with your
profits so you have them ready ‘just in time’. Sell that and reinvest
in more merchandise. Pretty soon you will have an idea of how
much inventory you must have on hand at any time.
Pricing
Use your warm market for your first sales of each new product for
testing and to build your confidence. You can also sell at a lower
price to your warm market. When you sell via the Internet or other
location, you will have additional costs.
For a steady business income, work on multiple channels of
selling, like eBay, Amazon, or Esty on the Internet. You may also
add a physical location, like a flea market or at a retail location. No
matter where you sell, you will have to adjust your pricing
appropriately.
Keep expenses down and play with retail price points until you
find the magic number that sells your product. For example, when
selling on eBay, you may find that a fixed price sells better than an
auction; or you may find that the time of day or the day of the
week that listing ends makes a significant difference in final sale
price.
Who Will Buy My Products
No matter what, if you want to sell a product, pick one that you
have confidence in, preferably one that has a long history of
quality, and that will be easy to sell. As I’ve said before, most new
entrepreneurs start by selling their product or service to their
family, friends and acquaintances. This is called your ‘warm
market’. They are a great way to begin and learn your presentation
because you know your mistakes will be forgiven. That’s how I
began and that’s how I recommend you should begin.
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Shipping
I sell pricing models with shipping included on some sites and
shipping as an added charge on others. Both models work. Try
both and see what sells for your product.
There are various shippers that you may use for your products.
USPS (United States Postal Service) is commonly used as is UPS
(United Parcel Service) and FedEx (Federal Express). Shop them
all as they have advantages over one another depending on the
details of shape, weight and locations. Shipping insurance is also
available, through the carriers or through a separate insurance
carrier. Look at all your options. Keeping costs down in this area is
critical to your profitability.
Returns
Don’t be surprised! If you are selling on the Internet, there will be
returns. There will be shipments lost in the mail, or stolen by the
mail carrier service. How do I know this? It has happened to me!
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8 Business Structure
Business structure is really important, but start selling first! Don’t
get stuck in startup mode. It’s too easy to have all the theory in
place and to get busy with startup activities that have nothing to do
with selling a product and making you money! Only once you’ve
begun to make a few bucks or a few hundred or a few thousand
bucks, is it time to begin thinking about the structure of your new
company.
What’s the best business structure? The business structure sets up
the rules of the game. It’s important because you must have some
structure to your new business, otherwise it can get out of control
and you will waste too much time on non-selling activities.
When I first began, I wanted beautiful, professionally made

business cards and stationery that would impress my new
customers. But then I thought about it and realized that was
nonsense. I needed business cards but nothing fancy and no special
fancy stationery. So I went to a small Sir Speedy type store and
placed my order for business cards. I received my business cards a
week or so later. They looked great, by the way! Now, you can
make your own business cards at home on your computer. You use
special business card paper you can get cheap at Office Depot, etc.
and Microsoft Word has a program to business cards. So does
Avery.
You won’t need a special business office because you will be
working from home in the beginning, or forever if it suits you.
Many businesses earning hundreds of thousands of dollars a year
are still run from home. If you don’t believe me look on eBay or
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Craig’s List.
In all the examples I gave earlier in the book (see pages 10-11), all
but one worked their business as a Sole Proprietorship when they
started.
Business structure can be very confusing at the beginning. What’s
the best business form? What is a Sole Proprietorship? What about
a Corporation? What about a Partnership, or a Limited Liability
Company?
Business Name, Sales Tax ID and FEIN (EIN)
Most business owners use a business name, sometimes called a
trade name. Or, you can just do business with your own name.
Sole Proprietorships can do that If you want a separate business
name (always a good idea) you should make the effort to do as
much as possible to keep your business name unique, not a copy of
someone else’s business name.

One way is to file your business name with the Department of
State in whatever state you live in. A business name separate from
your name for a Sole Proprietorship is called a FICTITIOUS
NAME. In Florida it costs $50 to register your new Fictitious
Name for a 5-year period. In whatever state you live just Google
‘Fictitious Name Registration in Florida (or whatever state you
live in). It should take you to the place in your state’s official web
site where Fictitious names are registered.
Be careful what Google listing you click on. Fictitious Names are
ALWAYS registered with the state government, most usually with
the Department of State There will be a number of private
companies with listings that want to sell YOU something and
make YOU pay to have them do the registering for you. You can
most often file your Fictitious Name online and pay online. Be
aware that the state will require that you advertise your company
name in a paper of general circulation, the purpose of which is to
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find out if any other business out there has the same name you
want. It is called a Fictitious Name ad and should be in the
Classified section. It will cost anywhere from $15 to perhaps $50
depending on which publication you use. I try to find the least
expensive publication as long as it has general circulation. Where I
register my Fictitious Names costs $35 and they provide me with a
copy of the ad after it’s printed.
You will also want to register with your State for a Sales Tax ID.
You will use this number to buy wholesale products. You will not
pay sales tax on the items you purchase for re-sale and you will
collect sales tax as required by your state and local jurisdiction.
Sole Proprietorship
In the beginning, when you are first starting out, just getting your

feet wet, so to say, you do not need a rigid formal structure. You
do need a system, a business system you can work with without
spending much money on it. The Sole Proprietorship is one of the
three types of business entities. It is also one of the three business
entities about which the IRS has written tax code.
A Sole Proprietorship is the quickest, least expensive, and easiest
type of business entity in the beginning. It has less formality than
Partnerships, Corporations or Limited Liability Companies.
However, it also carries no (zero) liability protection to you. What
follows are the questions I normally receive and my replies to
them.
I would be remiss if I didn’t say a word about taxes. You need to
know this so you are not blindsided when you find out you may
have a tax bill from filing your 1040 income tax return. A Sole
Proprietorship will file a Schedule C as part of the 1040 income
tax return. Schedule C is just a reporting of your income and your
expenses. There are two kinds of tax you will pay with a Sole
Proprietorship. One is the ordinary income tax and the other is
called Self-Employment Tax (SE Tax). SE Tax is NOT income
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tax. It is a way for the IRS to collect from you (as your business)
the Social Security tax and Medicare tax that is not withheld from
the profit – which is considered like your W-2.
As you know, if you have ever been paid on a W-2, all your
income is subject to withholding for Social Security tax and
Medicare tax. This percentage is fixed. Currently it is 5.65% of the
profit. It used to be 7.65% of the profit but the Obama
administration reduced the Social Security tax by 2% to put more
income into the family’s pocket to help pay bills and boost the
economy. (At the time of this writing it is possible that the 2%

Social Security Tax savings may end as of December 31, 2012.)
What you may not know is that if you are a W-2 employee your
employer must match the exact amount withheld from your W-2
for Social Security and Medicare tax and pay that over to the IRS.
The employer’s payment of tax does NOT add to your individual
Social Security account. It goes into the general Social Security
and Medicare fund. So, how does the IRS collect from the Sole
Proprietorship the Social Security and Medicare tax that is paid by
the employer? Since you and your business are one as a Sole
Proprietorship, the IRS considers the Sole Proprietorship to be
both the employee AND the employer, so it doubles the tax
amount. That’s why Sole Proprietorships are taxed in two different
ways regular income tax AND Self Employment Tax. The SE tax
alone equals 13.3% of the profit (without the Obama 2% reduction
in Social Security tax that would be 15.3% of the profit).That’s
about all you need as far as paperwork goes for the Sole
Proprietorship.
In one of my earlier examples, the owner formed a Corporation
instead of a Sole Proprietorship. The owner did this because it was
required to be a Corporation by the School Board.
Corporations
Corporations come in two flavors, C and S. C Corporations are
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