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William Ellis, CPA
William Ellis, CPA, CPA
Category: Tax
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Experience:  Over 15 years of experience in public accounting
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if im holding an event that is a year away and im collecting

Customer Question

if im holding an event that is a year away and i'm collecting registration fee to pay for everything do i need to get a tax id or bussiness lic
Submitted: 4 years ago.
Category: Tax
Expert:  Richard replied 4 years ago.

Good evening. To protect yourself from any personal liability from anything related to this event, I would recommend that you form an LLC and then get your LLC its own Taxpayer Identification Number. That will protect your personal assets from any liabilities connected with this event.

 

 

I hope this has given you the guidance you were seeking. I wish you the best of luck!

 

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The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

Customer: replied 4 years ago.

so you can't give me the information about washington states tax law

if i have every person attending sign a disclaimer and a release of liabilities would this protect me

Expert:  William Ellis, CPA replied 4 years ago.

I don't know if disclaimers are enforced there, but I do know that you can set up an LLC almost for free by going to whichever website--probably the Secretary of State--and downloading template for articles of incorporation. This is a lot cheaper than enforcing disclaimers through the courts. I actually would advise you to take this a step further and form a regular corporation then elect to be an S-Corp. You'll still have the asset protection, but you'll be able to have the Corporation show the receipt of unearned revenue without having to report this as personal income on your individual return this year. Hope this helps, Bill

Expert:  William Ellis, CPA replied 4 years ago.

Did I throw too much at you? The main reason I don't like you running this through an LLC is because the IRS considers single-member LLCs to be disregarded entities. That means you'd be reporting the activity on Sch. C. There is no place on Sch C to enter unearned income. Since you're probably a cash-based filer, the IRS could tax you on these receipts before you'd get the chance to have expenses to set against the income. Thanks, Bill

Customer: replied 4 years ago.
who could i talk to in washington state to understand what you just said
if i have a bank account set up with the events name on it and the the 2 co-chairs name are you saying the irs will tax me. how will they know about this event or account
Expert:  William Ellis, CPA replied 4 years ago.

Does this event have its own tax ID number issued by the IRS? If it doesn't, then your or someone else's social security number is XXXXX to the event's bank account. This is the controlling issue. If your social security number is XXXXX the bank statements, the account activity will be reported to the IRS with all of the other activity like your wages and mortgage interest. It does not matter that the event's name is XXXXX XXXXX the statements. If this event is not incorporated, you can visit the State of Washington's Secretary of State's website at www.sos.wa.gov/corps/ to see what is required to incorporate. Once the name is XXXXX XXXXX should be able to go the IRS's website at https://sa1.www4.irs.gov/modiein/individual/index.jsp and apply for the tax ID on line. After you have this number in hand, go to the bank and change the event's account information to reflect its tax ID.

 

Hope this helps, Bill

Customer: replied 4 years ago.
we don't have a tax id can we just get a tax id with out being incorporated if we just use the account to cash check and keep only cash will we still be taxed
Expert:  William Ellis, CPA replied 4 years ago.
Yes you can. If you and the others involved are going to divide the net profits from this event, then you are operating a partnership. You'll need to file a partnership return. If you don't organize this and someone gets hurt and sues, they can still attach damages to your personal property.
Customer: replied 4 years ago.
we are not going to have money left over we are spending what comes in

i'm trying to understand this and don't understand why we would have to pay taxes on this money if what we collect goes to pay for this event
Customer: replied 4 years ago.
Bill
is there anyway we can do this without having to pay taxes
Expert:  William Ellis, CPA replied 4 years ago.
Again, get the ID number. Then the partnership can show the expenses against the income next year.

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William Ellis, CPA
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Over 15 years of experience in public accounting