Have a Tax Question? Ask a Tax Expert
please find here a reference to Michigan business tax forms - http://www.michigan.gov/taxes/0,1607,7-238-44079---,00.html
For sales tax issues - please refer to 2009 Instruction Book - http://www.michigan.gov/documents/taxes/78_255401_7.pdf
You must register to pay sales tax if you make retail sales of goods in Michigan even if the items you sell are not taxable.
Who is required to have a sales tax license? - Individuals or businesses that sell tangible personal property to the final consumer need a sales tax license. An application for a sales tax license may be obtained on our web site. In order to register for sales tax, please follow the application process.
See additional information here - http://www.michigan.gov/taxes/0,1607,7-238-43529-154427--,00.html
Michigan DOT offers Tax Seminars for New Business - see registration form for
Coming in Spring 2009 here - http://www.michigan.gov/documents/treasury/3838_267928_7.pdf
You do not have to register LLC or corporation - unless you want to legally separate the business activities from your personal activities.
In this case you will be considered a self-employed.
Based on your estimated income - you need to pay quarterly estimated taxes to the IRS - http://www.irs.gov/pub/irs-pdf/f1040es.pdf
and to the Michigan DOT - 2009 Estimated Individual Income Tax Voucher - http://www.michigan.gov/documents/taxes/MI-1040ES_260702_7.pdf
Let me know if you need any help.
The IRS expects taxes to be paid as income is earned or received.
Assuming - you are expecting gross income for 2009 to be $30,000 and your qualified business expenses $5000 - so you estimated net income would be $25,000
If you are single , standard deductions, no dependents, no other deductions or credits - your will owe self-employment taxes $25,000*15.3%=$3825
your taxable income will be $25,000 - $1913(half of self-employment taxes) - $5600(standard deduction) - $3600(personal exemption) = $13887
and your estimated income tax liability is $1666
Your total estimated tax liability would be $1666+$3825=$5491
Generally, you should make estimated tax payments for 2009 if at the tax time you will owe more than $1000 and the total amount of tax withheld and your tax credits will be less than the smaller of: -- 90% of the tax to be shown on your 2008 tax return; or -- 100% of the tax shown on your 2007 tax return (110% if your 2007 adjusted gross income exceeded $150,000).
Michigan income tax rate is 4.35%
Some cities have additional taxes - see here - http://www.crcmich.org/TaxOutline/Income/ucit.html
Your Michigan taxable income based on assumptions above would be
$25,000 - $1913(half of self-employment taxes) - $3600(Exemption allowance) = $19487
Your estimated Michigan tax liability is $19487*4.35%=$848
You main task would be to keep a good record of your income and business expenses.