Home New mexico tax How to formalize this side activity »Albuquerque Journal

How to formalize this side activity »Albuquerque Journal

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Entrepreneur, concert economy, secondary activity, hobby for a business. No matter what you call it, people have started businesses to make money part time or full time. It’s called small business, but that’s just a classification. There is nothing small about it. They contribute a large part of our economy, and it takes a great thinker to be successful.

Are you planning to start a business? Do you have a skill, knowledge or talent that you think can fill a need? Help is available to think about how to start and grow a business.

Where do I start?

There are several agencies and organizations that will help you think critically about starting a business. Many offer free or low cost services. Plus, they work together and refer to each other to help you out the best way.

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• Small Business Development Center at CNM www.nmsbdc.org/locations/albuquerque (505) 224-5250

• New Mexico Small Business Development Center www.nmsbdc.org/

• NM Department of Economic Development www.gonm.biz (505) 827-0300

• WESTT www.wesst.org (505) 246-6900

• Service Corps Of Retired Executives (SCORE) www.score.org (505) 717-4058

• Veteran Business Outreach Center (VBOC) www.nmdvs.org/veteran-business-outreach-center/ (505) 220-9932

• Small Business Administration www.sba.gov/offices/district/nm/albuquerque (505) 248-8225

• Technical Assistance Center for NM Supply www.nmptac.org (505) 224-5965

What is a business plan and do I need it? A business plan is highly recommended. Going through the process of writing a plan helps you think through the critical issues for your business to be successful. Include questions such as a clear description of your product or service, who your customers are and how will connect with them, prices, regulations, will it be full-time or part-time for you and other considerations. .

Do I need a business registration or a license? Albuquerque and most of the surrounding communities require low cost registration or licensing. You register online or call the business registration office for assistance. In Albuquerque, go to www.cabq.gov/planning/business-registration-information or call (505) 924-3890.

Do I have to register with the state? Anyone who does business in New Mexico must register with the Taxation and Revenue Department (TRD). After registering, you will receive a New Mexico tax identification number. Use this tax number to report and pay tax on gross receipts of state and local options, New Mexico withholding tax, and compensation tax under the Combined Reporting System (CRS). Known as the CRS Identification Number, it is used to report and pay taxes levied on the gross receipts of businesses conducted in New Mexico. You can complete a paper registration form and deliver it to a local TRD office or complete it online at www.tax.newmexico.gov/businesses/. Click on “popular information” then “how to register a business”.

All corporations, limited liability companies (LLCs) and partnerships must first register with the Secretary of State. You can register LLCs online, but partnership and company registration forms must be completed and submitted by mail or in person. www.sos.state.nm.us/business-services/start-a-business/.

Can’t I just be self-employed?

Think about how you want to organize your business and seek training and advice from the agencies identified above. Sole proprietors or LLCs are common for people starting a business.

That’s none of my business ; I will be an independent contractor. What should I consider?

As an independent entrepreneur, you are a business. Look for training and advice from the agencies listed.

Can I have a business in my house?

You’ll want to check your local zoning requirements. The regulations differ depending on your business plans. Determine if you will be working from home with or without clients visiting your home.

What about taxes?

Discuss income taxes, social security, and health insurance with one of the agencies identified above, and consider speaking to a tax professional. Online training is available from New Mexico Tax and Revenue: www.tax.newmexico.gov/news-alerts/workshop-schedule/ and from the IRS: www.irsvideos.gov/Business.

Sources: Websites identified above; Francisquita Fernandez, Center Director, Small Business Development Center at CNM. If you have a question you want answered, go to abqjournal.com, click on “opinion” and “submit letter or column.”


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