Author Topic: DBA checking account? (Doing business as...) Side hustle  (Read 731 times)

ParkwayD123

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DBA checking account? (Doing business as...) Side hustle
« on: July 21, 2018, 02:08:49 PM »
Good afternoon, everyone!

I am about to start my first side hustle.
I'll be taking over the social media marketing for a company's Instagram and Facebook.
I'll be making $250 a month and this is where my question comes in.

I have the option of getting a check cut each month or receiving a $250 gift card to this company's online store.
This company is a great brand in my hobby field, so both options are good for me.
Im guessing that even if I just got gift cards the whole 12 months it's still taxable, so I want to do this all right.

Would you recommend just setting up a DBA (doing business as..) checking account with a bank?
Then just flow all the money through that and leave 25% in it to pay taxes at the end of the year?
I've heard of this method on the Dave Ramsey podcast and it sounds pretty simple.
Does this sound smart?


Thank you for any information that you can give me!
I'm very excited to start a side hustle.

mozar

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Re: DBA checking account? (Doing business as...) Side hustle
« Reply #1 on: July 24, 2018, 11:30:39 AM »
I would ask for a check in your name first. The first step (this is when I did this 5 years ago so things may have changed) is to file a business license with your state which I did online.  Then I took that to the bank. Once you have that account you can write a check to the dba account. Then you can ask for your checks to be updated if you want.

secondcor521

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Re: DBA checking account? (Doing business as...) Side hustle
« Reply #2 on: July 24, 2018, 12:45:46 PM »
In my state (and I think in others as well), if the DBA name has your full name in it, then you don't need to get a business license from the state and any local bank can open a business checking account for you.  So for example if my name were John Q. Public, I could go to my local bank and open a business account for John Q. Public DBA John Q. Public Enterprises.

Then just give your DBA name to them and have them write you checks.  Deposit them in the business account.  Done.

Business checking accounts sometimes come with higher fees than personal accounts.

Yes, gift cards would be considered taxable income as well.  I'd do the checks instead, personally.

Retaining 25% for taxes is smart.  If you start making more, you may want to look at your withholding situation and make sure you are withholding enough overall to avoid penalties.

Good luck!

soccerluvof4

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Re: DBA checking account? (Doing business as...) Side hustle
« Reply #3 on: July 25, 2018, 12:22:36 PM »
Take the check

ParkwayD123

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Re: DBA checking account? (Doing business as...) Side hustle
« Reply #4 on: July 25, 2018, 07:35:25 PM »
Thank you for the information everyone!

e34bb098

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Re: DBA checking account? (Doing business as...) Side hustle
« Reply #5 on: July 26, 2018, 12:48:27 PM »
Can confirm that:

1. A check in your name is best.

2. Opening a business account is second choice, due to the higher fees.  As mentioned, in most states if your business name contains your last name, and your business, then you do not need a Fictitious Name License.  E.g. "Smith Landscaping" does not need a license, but "ABC Landscaping" would.  You would also need a Fictitious Name License if your business name implies other owners/parties, e.g. "Smith & Sons Landscaping," "Smith & Co. Landscaping."  So keep it simple.  As a sole proprietor, you can use your own SSN as the tax ID, which will keep taxes simple.

I would not get the gift card.  $250 you can only spend at one place, vs. $250 you can spend (or save) anywhere?