Business registration yes/no, tax options
February 3, 2010 | 70,00 EUR | answered by Michael Herrmann
I am an author, mother, currently married without a permanent job and without any income of my own, and I would like to offer my own texts in the form of audio files as paid downloads through a website with an e-shop function.
In order to work in peace, I rented a small second apartment last week.
Question 1:
Do I have to register a business immediately or can I start right away and wait to see how things develop? There is currently no business registration as an author, as there is no income after deducting costs. So far, income/expenses have been handled through the income tax return.
Question 2:
If an immediate business registration is necessary, how should it be classified as a main or side job?
Question 3:
How should the business registration be formulated? In the past, I have already worked in other areas with a business license, and based on my experience, the wording towards the tax office is an important point in the business registration.
Question 4:
To what extent are my second apartment, travel expenses, equipment purchases, etc. already tax deductible, or is this only possible as part of the business registration? Is it possible to retroactively deduct these expenses?
Dear inquirer,
first of all, thank you for your inquiry, which I would like to answer based on the information you provided and in the context of your initial consultation. The response is based on the facts presented. Missing or incorrect information about the actual circumstances can affect the legal outcome.
1) to 3) As a writer, you are self-employed according to § 18 of the Income Tax Act if you only sell your own texts. Therefore, no business registration is required due to the lack of commercial activity. Since you have already reported income in this area in your tax return, there is no need to inform the tax office again. Renting a workspace does not trigger a new activity under tax law.
4) All expenses related to author activities are deductible as business expenses at the time of expenditure. A business registration is not yet required even for commercial activities. It is essential that the expenses are intended to generate future income. Therefore, income does not have to be earned at the moment if there is an intention to generate income in the future.
If you had expenses last year, these can be claimed as business expenses in the income tax return for 2009. If a corresponding loss cannot be offset against other income, it will be carried forward as a loss carryforward in 2010 or later. This can lead to tax reductions from older expenses.
I hope this information gives you an initial overview of the situation and remain
Yours sincerely,
Michael Herrmann
Dipl.-Finanzwirt (FH)
Tax Advisor
