New online entrepreneur seeking advice.

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Terry Thompkins

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Kentucky
Hi, i am starting a new online business where i will facilitate the trading of domain names for other domain names for a small fee. As domains are not taxed, will i have to pay any taxes for operating this business. I also would like to know if i need a business license for this type of business as im not selling anything, just providing a service. I really appreciate any advice you all could give.

Thank you
 
savon klein said:
Hi, i am starting a new online business where i will facilitate the trading of domain names for other domain names for a small fee. As domains are not taxed, will i have to pay any taxes for operating this business. I also would like to know if i need a business license for this type of business as im not selling anything, just providing a service. I really appreciate any advice you all could give.

Thank you
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Yes, you are selling something. Your services.
 
And, yes, you have to pay appropriate taxes, etc., on your income.
 
Your fees are income. You will pay federal and state income taxes and federal self employment tax. Start with the IRS website and download Schedules C and SE to get an idea how that works. I'm sure that KY has a state income tax website that would be equally helpful.

You may even have to collect and remit state and local sales tax. There are tax agencies that can show you how to do that if applicable.

You are likely to have to register your business with the state. The Secretary of State's office can give you some guidance.

You will need appropriate professional liability insurance. Trading domain names may appear innocuous but your mistakes can potentially cause somebody to lose a great deal of money for which they will undoubtedly sue you.

There's a lot more to running a business than waking up one morning, going online and raking in money.
 
savon klein said:
As domains are not taxed, will i have to pay any taxes for operating this business.
Click to expand...

That is an excellent question you should pose to YOUR CPA, for a small fee, I'm almost sure.
 
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