March 24, 2022
Who here gets the heebie-jeebies whenever you think of the legal and backend side of your business? Taxes? Terms and conditions?
Legalities are typically the things that are most ignored when building a business because they’re confusing, hard to understand, and just plain terrifying sometimes. However, the legalities of business DON’T have to be scary, and to prove that, we are bringing on our absolute favorite lawyer in the business, Paige Griffith of the Legal Paige for her 3rd time on the show to do a rapid-fire Q&A with us.
Today we’re pulling from questions that YOU, our listeners, submitted for Paige to answer. All the nitty-gritty legal things from a disclosure page on your website or blog for affiliate links and how to set up a DBA under your LLC (and what the heck those letters even mean!!), all the way to whether or not you have to file quarterly taxes, what you can write off each year as a business expense, legal things to keep in mind with passive revenue streams such as an online shop or online products, and lots more.
This episode is packed full of super helpful tips and simple breakdowns of the laws and legalities you’ll want to know as an entrepreneur. So if you’re ready to get FREE legal advice from one of the coolest and most knowledgeable lawyers out there, grab a pen and paper, and let’s go!
Paige is the founder of The Legal Paige, a virtual law firm working with online businesses and wedding industry professionals. She is a certified Juris Doctor and holds a double B.A. in Economics and Political Science. After working as a federal law clerk, Paige traded in the traditional law life for a virtual one and opened the doors to The Legal Paige in 2018. She helps her clients run legal and protected businesses and counsels them on issues related to contracts, intellectual property, privacy, and business law.
There’s a difference between a very simple affiliate disclosure and website terms and conditions that have further legal language and jargon surrounding how you’re affiliate links work and commission. The expensive part is the website terms and conditions and those are what you see linked at the bottom footer of your website with full affiliate disclosure clauses in them. That is something you could work towards if you are worried about the expense of it. Website terms and conditions actually aren’t legally required to have on your website, they are just really good to have on your website for legal purposes like copyright infringement, plagiarizing actually text or copy on your website, or if there is ever a discrepancy with your affiliate disclosure links. That can be acquired over time.
A simple affiliate one-sentence disclosure is required by the FTC (Federal Trade Commission) if you are having an affiliate on your blog. It is good to put it near the bottom with a simple phrase that says “There may be affiliate links on this blog post whereby I may earn a commission rate”. That is absolutely required by the FTC that if you are an affiliate or brand partner that you are disclosing that to consumers.
LLC is a Limited Liability Company, which is an actual business entity that you register with your state. A DBA is a Doing Business As, this means it is not an actual business it’s a different name that your business is operating under. It can also be called an Assumed Business Name or a Trade Name or Fictitious Name with your state. Most states will do this through your secretary of state’s website, where you will want to file a DBA. This is just a name that your business operates under. It is not a legal entity. You can be a DBA even if you are a sole proprietor. The main thing to remember is that DBAs cannot legally enter into contracts. You have to use your corporation’s name when signing contracts and above your signature.
It depends. Individuals including sole proprietors, LLC, partnerships, single-member LLC, and S Corporations, all of those have to pay estimated taxes quarterly if they expect to owe more than 1,000 dollars when their return is filed. You don’t really know until your first year of filing, the IRS isn’t going to come to track you down your first year of business if you made over 1,000 and you didn’t pay quarterly taxes. Usually, it’s after 1-2 years with your annual filings that you would then be expected to know your business is going to be generating a profit and you’ll be paying more than $1,000 dollars in taxes, so then you are required to pay quarterly taxes.
Try to keep your business expenses low, there is this myth in the industry that we should expense everything at the end of the year. That is a bad mentality to have as a business owner because you are running a for-profit business, you don’t want to be running a break-even business. You don’t need to expense everything.
What counts: office supplies, software, any type of equipment, anyone that has a laptop, desktop, hard asset equipment. Your office desk and chair, furnishings in your office can be expensed, any type of decor.
Big no-nos: Clothing unless it has your brand logo on it. Clothing for a one-time brand photo shot is never going to be an expense. Coffee shops are a big no-no. Any more personal enjoyment items that are solely for business purposes.
Food was confusing how to expense previously to the pandemic. It was only 50% of it could be deducted, usually, it had to be when you were traveling, solely for business purposes. Right now they have changed the laws for 2021 and 2022 for food and beverage’s provided by restaurants can be 100% deducible from your business.
Yes, it is. You’re are investing and you want to make sure your bookkeeper is keeping track of that. That would come off your taxes at the end of the year. It depends on your tax brackets and the net profit of your business every year, but that is something to be noted and will help with the starting basis of your business.
Anytime you are paying yourself from your business account to your personal bank account. If you are a sole proprietor or single-owner LLC then all of those owner distributions that you make will be taxed at the end of the year. It’s not just your business profits. All of your business profits and owner distributions at the end of the year will be taxed through your personal tax return through what is called the form schedule C. It will take into account your capital contribution.
Write down these checkboxes as you start creating your first passive income venture, especially if you are doing it online and through a digital shop.
Pixelcut: https://www.pixelcut.app/
Keeper & Co.: www.thekeeperco.com
Use code “HEARTFAM” for 10% off
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WASSUP FRIENDS. We’re Evie + Lindsey, co-founders of this wild partayyy called The Heart University. Our goal is to empower entrepreneurs to kick freaking BUTT in their businesses, dive down into the heart of their why and how, and serve you with all possible tools you’ll need to up-level your business game and CRUSH those goals of yours.
Whether you’re coming to an in-person workshop, joining our online course, or soaking up all the strategies via this blog or our podcast, we’re STOKED you’re here + can’t wait to see you out there kicking butt.
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