Business licenses, taxes, fees, and regulations

It seems that everyone wants to tell you what to do when you set up your practice. You can disregard a lot of this advice, but some things you cannot ignore, such as licenses and regulations set down by federal, state, and local entities.

Here are some basics to comply with these rules.

U.S. REGULATIONS

• Taxes. You will need to pay federal income taxes for your practice, depending upon your type of legal structure.

• Sole proprietorship. Taxes paid on your 1040 (Schedule C filed showing business income).

• Limited Liability Company (LLC). Single member LLCs are taxed as sole proprietorships, whereas multi-member LLCs are taxed as partnerships. A partnership tax return is filed, but partners pay taxes based on income share.

• Corporation (Sub-S or C-Corp). Corporations pay taxes on corporate income on separate corporate tax forms.

• Licenses. No federal licenses are required for your practice.

• Other. You will need an Employer ID Number for your business, which you can obtain by completing an SS-4 form online at www.irs.gov.

STATE REGULATIONS

• Taxes. Most states require residents to pay state income taxes. You'll pay based on your practice's income in the same manner and on the same forms as federal taxes.

• Licenses/legal forms. If you are creating an LLC, PLLC, PC, Sub-chapter S Corporation, or other specific legal form, your business will need to register with the state where you will be practicing. For more information on filing, go to the Secretary of State Web site, and look for "business services."

If you are forming a sole proprietorship, you may still have to file an assumed business name (sometimes referred to as a "dba," or "doing business as") form with the state. Some states also require a state business identification form.

You'll also need to acquire your state chiropractic license. For information on your state's licensing requirements, go to the Federation of Chiropractic Licensing Board (www.fclb.org) and click on "chiropractic boards."

LOCAL REGULATIONS

Some cities and counties require you to pay taxes. Check the city and county Web sites where you'll be practicing.

Don't hesitate to get your CPA and attorney involved to help you file for the taxes and licenses you need. Although the federal requirements are standard, state and local laws vary.