Expert: Leslie Truex - 4/7/2009

Question
QUESTION: A friend wants to start a home ironing service and wants to know what taxes, besides federal income tax, will she be obligated for.

ANSWER: Hi Pat,
That can depend on where you live and what sort of local/state taxes are required. Generally you pay income tax to the Federal and State governments. Because she's providing a service and not tangible products, she probably doesn't have to collect and pay sales tax.

A good place to check for information based on your location is the nearest SCORE office or your local business regulatory office (the one that gives business permits/licenses).

Leslie Truex
http://www.workathomesuccess.com

---------- FOLLOW-UP ----------

QUESTION: A friend in Texas wants to start a home ironing service and wants to know what taxes, besides federal income tax, will she be obligated for. (followup to previous question listing state)

Answer
Hi Pat,
According to Bankrate.com at http://www.bankrate.com/brm/itax/edit/state/profiles/state_tax_Texas.asp

"Texas is one of only seven states that does not tax individual wage income. The state's constitution restricts passage of a personal income tax. The Lone Star State, however, does collect a gross receipts tax from some businesses."

That means she may need to pay income tax on business earnings. You can check here http://www.window.state.tx.us/taxinfo/taxrates.html for more tax information in Texas. Check the Miscellaneous Gross Receipts Tax.

I'm not familiar with every tax code in every city of every county of every state. So you should contact local business regulators for help. The office that gives business permits/licenses should be able to help. Or a local SCORE office.

Leslie Truex
http://www.workathomesuccess.com