This post is for people who would like to start a business here in Mississippi.
I had thought forever about making my hobbies a legitimate business. I never really worried about it since I had a full-time job teaching and am a military spouse who will eventually move though. Then, a group of women I was friends with here started a chapter through the Milspo Project and started to really inspire me! After a year of grooming me into the idea, I finally asked for legitimate help! Brianna @ Based in Design invited me to her home office and walked me step-by-step through the process of starting a business in Mississippi (She is fab, BTW and has a design business that is specifically geared to military and other transient clients. Check it out!).
So, since I just followed all of those steps just this month, I am going to outline here how you can start your home business in one day. I started mine so I would quit holding back, and I don’t regret it at all! Email me @ meganleighacosta@gmail.com if you have questions or need help! Please note that I am not a lawyer or CPA and am not offering legal or financial advice. I am simply reviewing the steps I took to become a sole proprietorship in Mississippi.
First, a list of things to figure out before you do this:
1. Will your business be run out of your home or a storefront?
2. Will you use your name or register a DBA (Doing business as). You can check here to see if someone is already doing business under your name in Mississippi.
3. Will you be a sole proprietorship or an LLC? (This guide is specifically for a sole proprietorship but I can provide resources for anyone looking for an LLC).
4. Will you need to collect sales taxes? (i.e., are you selling goods or services that can be taxed?)
5. Will you have employees or people you need to issue 1099s to?
6. Have you opened a separate checking account to keep track of your business finances yet? (Highly recommended)
Step one: Register your business with the Federal Government.
The first thing you need to do for your business is get yourself a federal EIN.
Go to www.irs.gov and get yourself an EIN! (Exact spot will open when you click that link)
Make sure you can print before you do this, they will give you a one-time copy of your EIN which I recommend saving as a PDF and printing to file.
Step two: Register your business in Mississippi (Secretary of State)
This step will vary depending on your business. I am an artist, and am a sole-proprietorship. In Mississippi, sole proprietorships do not have to register with the Secretary of State unless they have a fictitious business name. If you are DBA (“Doing business as”) another name other than your legal name, you need to file for a DBA or fictitious business name. For example, if I was doing business as “Megan Leigh Acosta Photography” I would need to register that DBA with the Mississippi Secretary of State.
Since I am doing business just under my legal name of Megan Leigh Acosta, I did not have to register.
If you DO need to register your fictitious name, do that here. This is also where you would register your LLC or corporation if you are going that route. For more info about the different types of business formations, click here. Also please note that there are Small Business centers around Mississippi that will help you start your business for free! We have one in Starkville, MS for example.
Step Three: Register to pay taxes at the Department of Revenue (TAP)
This step was trickier for me, but lucky for you I have already figured it out! Side note, the Department of Revenue employees are actually super helpful. I called them about 10 times with various questions and they were always extremely quick to pick up and happy to help! They will stay on the phone and walk you through the entire process if you ask! This saved me a lot of trouble (and probably them too, in case I would have made errors).
To do this, go to this website. If you have filed taxes in Mississippi before, select “Add access”. If you have never filed taxes in Mississippi, select “Register new taxpayer”
Once you register for your individual taxpayer access, you will have to confirm your account before you have full access. Then you will move onto step 5.
Step Four: Register to collect Sales Tax through TAP
This is the step I almost messed up. I thought the step above was covering me and was waiting and waiting for sales tax access. I called and learned I actually needed to log back into TAP and register for a new sales tax account. To do this, login and select “register a new account” from the right menu on your home page. THIS is where you will select a “sales tax” account.
TAP will provide you with a questionnaire (a good time to call the Department of Revenue if you have questions) to see if you need to be collecting sales tax and where your business is located. You should know, that in Mississippi, if you are operating a business out of your home you must turn in a $500 cash bond or a surety bond from a bank of equal value. Eek, I know, but don’t turn around yet! This is where you dig deep and know that you are investing in yourself and your business. If you have a storefront, you do not have to pay this. If you get a storefront eventually, you can get your cash bond back. When you move and close out your account, you can get your cash bond back (this is what I was told over the phone by the MS DoR).
Surety bonds do not get paid back to you but can save you a little money up front. You will need to pay the premium every year though. I went with the cash bond because I know I will be moving and can get it back at the tail end. I was able to quickly put in my banking info right there in the application. At the end, it will ask you to mail in the original bond–this only applies to those submitting a surety bond or mailing in a cash bond. If you did the bank transfer with account/routing numbers this does not apply to you. You just wait after that.
Photographers, I will tell you that from my understanding (I asked the SBA in Starkville) you DO need to collect sales tax on your sitting fee and digital files. Photography is a special service in Mississippi and requires you to collect sales tax, as far as I understand. Other states will differ in their laws. Your best bet to understanding is to pick up the phone and ask someone. Better to be safe than sorry and in legal trouble! PS if any Mississippi photographers get a different answer, please let me know! I also collect sales tax on the goods I sell in my Etsy shop to customers in Mississippi. You cannot collect sales tax from someone living out of your state.
Step Five: Get your financial ducks in a row
You need to start keeping good track of your business expenses and income, now! You will need to turn in any sales tax you collect from sales of taxable goods/services to your TAP account each month. Organization is key! I use a program called wave that links to my business bank account and automatically tracks everything for me, including allowing me to create invoices and apply them to funds received in my bank account. This is crucial for me keeping track of my business expenses.
Wave even tells me how much sales tax I have collected and am liable to turn in to MS. Wave is free to use. They only take 2.9% from credit card transactions on invoices paid. That’s it! There are also two apps that go with it, one to take photos of your receipts and keep track of them (amazing), the other for managing invoices on the spot. Other options include Quickbooks or a good ole’ fashion excel document you could manually input. I have an Etsy shop in addition to my photography services that Wave even links to, but Quickbooks also partners with Etsy for a monthly subscription service.
Step Six: Pour yourself into your business
Start to invest your time and energy into your business! Get your social media going. Start following other small businesses on platforms such as Instagram and Facebook. If you are a Military spouse, consider joining your local Milspo Project Chapter to be a part of a network of people like you! Set measurable goals and meaningful ways to get there! ASK FOR HELP WHEN YOU NEED IT! You may be surprised how many people would love to support you and see you be happy and successful! 😉
Image © Megan Leigh Acosta 2017