Doing Business As (DBA)

[bncsimps]

Greetings
Quick question regarding DBA designation. I have a small cow/calf operation in AL; started the operation in 2005. I am considering applying for DBA name. I was wondering what the Pro/Cons are of applying for and operating under an assumed name DBA. Looking foward to reading your replies.

 

[Jeanne - Simme Valley]

I'm sorry, but I don't follow your question. We did not apply for our farm name.
If you want to operate as a corporation, or LLC, etc. you have to file papers thru an attorney.

 

[Kingfisher]

Greetings
Quick question regarding DBA designation. I have a small cow/calf operation in AL; started the operation in 2005. I am considering applying for DBA name. I was wondering what the Pro/Cons are of applying for and operating under an assumed name DBA. Looking foward to reading your replies.

I'm not a lawyer but In Texas you need a DBA in order to get a Tax Id from the State. That is generally for resale but I think the advantage to someone in an Ag business is the ability to buy stuff tax free that is for farm use. I can't imagine it is much different there. So........if you have been paying tax on , let's say feed, then your paying twice when you sell the cow.....

 

[bncsimps]

I'm sorry, but I don't follow your question. We did not apply for our farm name.
If you want to operate as a corporation, or LLC, etc. you have to file papers thru an attorney.

I don't want to operate as corp nor LLC...big difference from just applying for assumed name. I simply want to be able to use my farm name when conducting business. My main concern is keeping things in line with IRS requirements.

 

[dun]

I'm sorry, but I don't follow your question. We did not apply for our farm name.
If you want to operate as a corporation, or LLC, etc. you have to file papers thru an attorney.

I don't want to operate as corp nor LLC...big difference from just applying for assumed name. I simply want to be able to use my farm name when conducting business. My main concern is keeping things in line with IRS requirements.

Ask an accountant if it's IRS concerns

 

[cypressfarms]

Ask an accountant if it's IRS concerns

Good advice. I operate my farm as a DBA, which is almost the same as just doing it personally; it just let me set up seperate accounts so it is easier to keep track of expenses/revenues. Different states may have different requirements for DBA's, i think my state is fairly lax in their requirements. TO go to a LLC or S corp, however, is a lot of red tape and attorneys will have to be involved.

 

[TexasBred]

I'm sorry, but I don't follow your question. We did not apply for our farm name.
If you want to operate as a corporation, or LLC, etc. you have to file papers thru an attorney.

I don't want to operate as corp nor LLC...big difference from just applying for assumed name. I simply want to be able to use my farm name when conducting business. My main concern is keeping things in line with IRS requirements.

Go to legalzom.com. Cost $119.00 I think. Should cover everything you're wanting it for.

 

[bigbull338]

we just went to the bank an set the dairy account up as a DBA.an thats all we had todo.

 

[marksmu]

I'm sorry, but I don't follow your question. We did not apply for our farm name.
If you want to operate as a corporation, or LLC, etc. you have to file papers thru an attorney.

I don't want to operate as corp nor LLC...big difference from just applying for assumed name. I simply want to be able to use my farm name when conducting business. My main concern is keeping things in line with IRS requirements.

The poster before me hit the nail on the head. If you want to be a DBA, and have separate accounts, the only thing you need to do is goto the bank and open a bank account as a dba account.

For federal income tax purposes, a DBA is treated like nothing at all. In other words, the DBA is not a different entity than you personally. You will file the dba on your current tax return. Any income or expenses will be added to/reduced from your current income.

A DBA is treated the same as a sole proprietorship, or a partnership, but not a LLP.

Its somewhat confusing at first, but a DBA is the way to go if you just want a separate bank account, but not to have to file separate tax returns. I chose a dba for my farm/ranch over any other entity because I did not want to mess with the IRS and all the additional paperwork.

 

[Jeanne - Simme Valley]

You don't need a Tax ID - you can just use your SS #.

 

[bncsimps]

Thanks all...good info!

 

[TexasBred]

I'm sorry, but I don't follow your question. We did not apply for our farm name.
If you want to operate as a corporation, or LLC, etc. you have to file papers thru an attorney.

I don't want to operate as corp nor LLC...big difference from just applying for assumed name. I simply want to be able to use my farm name when conducting business. My main concern is keeping things in line with IRS requirements.

The poster before me hit the nail on the head. If you want to be a DBA, and have separate accounts, the only thing you need to do is goto the bank and open a bank account as a dba account.

For federal income tax purposes, a DBA is treated like nothing at all. In other words, the DBA is not a different entity than you personally. You will file the dba on your current tax return. Any income or expenses will be added to/reduced from your current income.

A DBA is treated the same as a sole proprietorship, or a partnership, but not a LLP.

Its somewhat confusing at first, but a DBA is the way to go if you just want a separate bank account, but not to have to file separate tax returns. I chose a dba for my farm/ranch over any other entity because I did not want to mess with the IRS and all the additional paperwork.

That's all that's necessary IF your bank will do it. My bank won't allow you to set up an account or order checks without the proper DBA forms "recorded" in the clerks office. Just old fashioned I reckon.

 

[Cowdirt]

Greetings
Quick question regarding DBA designation. I have a small cow/calf operation in AL; started the operation in 2005. I am considering applying for DBA name. I was wondering what the Pro/Cons are of applying for and operating under an assumed name DBA. Looking foward to reading your replies.

I'm not a lawyer but In Texas you need a DBA in order to get a Tax Id from the State. That is generally for resale but I think the advantage to someone in an Ag business is the ability to buy stuff tax free that is for farm use. I can't imagine it is much different there. So........if you have been paying tax on , let's say feed, then your paying twice when you sell the cow.....

In TN one can file with the State for sales tax exemption on most farm purchases. The first time you make a purchase at each business just present your proof. From there on you're in their computer. From that point on just keep all payments and receipts for your tax records. No point in a small operation making it more complex than necessary.

 

[Kingfisher]

The poster before me hit the nail on the head. If you want to be a DBA, and have separate accounts, the only thing you need to do is goto the bank and open a bank account as a dba account.

A dba is given in the county you usually reside in. The bank wants to see that slip usually before they give you an account with dba on it. Nowadays you can print your own checks so......

 

[Jeanne - Simme Valley]

Hmmm - maybe it's a state or local "thing". I simply opened a personal bank account and had my farm name & our names on the checks. When you go to a store to buy anything that is eligible for farm exemption, you just tell them that you are farm exemp, and you sign a tax waiver form, they keep it on record. They don't care if you are or are not, YOU are liable for signing the exemption form. They don't care if your checks read your farm name or not - they use your SS #.

 

[dun]

Hmmm - maybe it's a state or local "thing". I simply opened a personal bank account and had my farm name & our names on the checks. When you go to a store to buy anything that is eligible for farm exemption, you just tell them that you are farm exemp, and you sign a tax waiver form, they keep it on record. They don't care if you are or are not, YOU are liable for signing the exemption form. They don't care if your checks read your farm name or not - they use your SS #.

In MO you have to do the DBA through the state even if all you want it for is a bank account. Messed around with it a while back and decided it wasn;t worth the effort. The bank folks know me well enough I could probably cash a check made out to "Joe S--- the Ragman" without a problem

 

[Bonsman]

I have two LLC that I use. One is for the cattle and one is for the pickups/feeders and stuff. I do this to avoid personal liability in case someone is driving one of my pickups and runs over a school bus and hurts a bunch of children. This way, I am protected personally and my cattle are protected because they are in a different LLC. All that I am liable for is what my insurance covers and the value of the assets in the LLC.

The Pros of a d/b/a is that you can get a tax i.d. number and use it instead of your social security number. Typically, in most states you have to file the d/b/a with the clerk of the state/county to put everyone on notice that you own the d/b/a company. It also makes it easy to seperate your expenses and income and treating the d/b/a account like a business.

The Cons are that you are still liable for any debts, accounts, or lawsuits. You must give your social security number out so people can send you a 1099 rather than give them your social security number. For me, I would much rather have a tax i.d. number to give out than my social security number for people to send me a 1099. You do not need a lawyer to get a tax i.d. number. You can do it by yourself by contacting the IRS, or you can have your accountant do it for you. An LLC will cost you $500,00 from a lawyer. They have the same forms as legal zoom or the other online services. But the lawyers can explain it to you.

 

[bigbull338]

Hmmm - maybe it's a state or local "thing". I simply opened a personal bank account and had my farm name & our names on the checks. When you go to a store to buy anything that is eligible for farm exemption, you just tell them that you are farm exemp, and you sign a tax waiver form, they keep it on record. They don't care if you are or are not, YOU are liable for signing the exemption form. They don't care if your checks read your farm name or not - they use your SS #.

In MO you have to do the DBA through the state even if all you want it for is a bank account. Messed around with it a while back and decided it wasn;t worth the effort. The bank folks know me well enough I could probably cash a check made out to "Joe S--- the Ragman" without a problem

be glad your bank knows you.my dad done business with the same bank for over 40yrs an they didnt know him.1 day he went into the bank to cash a check,an they asked who he was .an he goes im so so husbend.an they oh yeah we know her real well.an he goes im the 1 that borrows money here.

 

[dun]

Hmmm - maybe it's a state or local "thing". I simply opened a personal bank account and had my farm name & our names on the checks. When you go to a store to buy anything that is eligible for farm exemption, you just tell them that you are farm exemp, and you sign a tax waiver form, they keep it on record. They don't care if you are or are not, YOU are liable for signing the exemption form. They don't care if your checks read your farm name or not - they use your SS #.

In MO you have to do the DBA through the state even if all you want it for is a bank account. Messed around with it a while back and decided it wasn;t worth the effort. The bank folks know me well enough I could probably cash a check made out to "Joe S--- the Ragman" without a problem

be glad your bank knows you.my dad done business with the same bank for over 40yrs an they didnt know him.1 day he went into the bank to cash a check,an they asked who he was .an he goes im so so husbend.an they oh yeah we know her real well.an he goes im the 1 that borrows money here.

Small town, not much turnover

 

[bigbull338]

this is a small town as well.an the only time he went to the bank was to deal with his notes.i to only go in if i have to.the last deal i done was over the ph.an had to go in to finish things.