Tax laws in Ohio

[windowwasher86]

As I've mentioned before, I am in the midst of launching a business consisting of janitorial services. The market for cleaning companies in Columbus, OH, surprisingly, is in high demand. As I'm sure it is everywhere at this point.

I started the business about a month ago, and have made a couple hundred bucks, along with some side jobs laying tile and what not.

My question is...

I will be registered and have my service vendors license/name registration in about a month, how am i going to go about filing my taxes? I've been told that if I make under $5,000 with my business in a 12 month period, I don't need to file them. I am very certain that by January I will not have made $5k, so would I be good to not file taxes this year if I only made a thousand bucks or so?

Also, I will have W2's from an employed job. Can I still write off all of the stuff for my cleaning business even though I'm not filing taxes on the cleaning business yet? Like can I still write them off of my normal income Im being taxed on?

Sorry if that's confusing!

[Evan]

I am not certain of the local tax laws in Ohio or what forms are required to be filed there. You should consult with a local tax professional who can advise you of those obligations.

For federal and state tax purposes though, if you are operating a business as a sole proprietor, you need to report all of your business income on Schedule C (even if it's $100, or $1K) which will pass-through to your Ohio state return. Whether a local return relating to the business separately needs to be filed, again, should be consulted with a local professional.

As you do have a requirement to file a return for the business, you will write off the related business expenses when filing Schedule C. They will offset whatever revenues you brought in. So if you brought in $5K, and then bought cleaning supplies worth $3K, your remaining $2K is what is included on your individual return subject to tax. It's also possible, depending on your initial investment, that you could have a loss in your first year. That income will generally offset your W2 wages and reduce your federal tax liability.