MKB@CMU-CS-C.ARPA (02/08/84)
From: Mike Blackwell <MKB@CMU-CS-C.ARPA> Well, the response to my original plea for help on starting your own garage business was underwelming (read: none), but I did get requests from ten others asking me to forward whatever info I got. I've decided to plunge ahead anyway, and I'll pass on what I've learned so far, and I'll keep the net updated, since so many others are interested (I'll bet there are lots of closet entrepreneurs out there). Maybe this will spur others on to reveal their secrets... Taxes: Federal income tax is the easiest. Just report the profit you've made during the year (net income - expenditures) on your 1040 and pay the tax. There are some tricks, though. Say you buy a computer to help run your business (to keep records, say). You can subtract the cost of the computer from your profits, and don't have to pay tax on it (indeed, you may show a loss). Plus, you can depreciate your purchases over the years, if you really want to get in to it. But basically, you just pay taxes on what you make. For more information, you should get the following IRS publications: Publication 334 (Tax Guide for Small Business), Publication 534 (Depreciation), and if you have a partnership, Publication 541 (Tax Information on Partnerships). They're free. State tax is much trickier, and depends on what state you live in. First there's income tax, which works like federal income tax, but then there's sales tax. Basically you have to charge your in-state customers some sales tax on their purchase (6% in PA), and then give that money to the state. You'll have to call your local bureaucracy for more info. Be prepared for a run around. Sorry I can't be more help here. Advertising: The only experience I've had here is with Byte magazine. Your best bet is to call their advertising department. They were EXTREMELY helpful. They'll keep in touch with you before and after the ad has been placed to make sure everything is the way you want it, and seem to go out of their way to make things go smoothly. You don't need to know anything: you can give them a rough copy of what you want your ad to look like, and they'll do layout for you. Be prepared to shell out BIG bucks, though! A "bit" ad (one of those ninth page B&W ads in the back) costs $955 for one month (includes a reader service number). If you buy six of them (spread out over the year, and you can change them), the price goes down to $865. Also a price break for three. They told me to sign up for six, that way I've got the good price if I really go for six (I doubt it), and if after a year I've really only run one or three or whatever, they'll bill me for the difference in price. But it's probably worth it: an average bit ad wins at least 300 responses. Also, most magazines have a new products section, which is free. You can send them your ad, and they might run a blurb on it. Can't hurt to try. So that's what I've learned so far. With any luck, I'll break even! Hope this is of some help to others. cheers, -m- mkb@cmu-cs-c
ron%brl-vgr@sri-unix.UUCP (02/08/84)
From: Ron Natalie <ron@brl-vgr> You grossly simplify things. For example: are you aware that you can get a tax credit for buying a computer for business purposes. Not deduction, but straight decrease of tax bill. There are some catches however. -Ron