Living with a family member

[AlmostThere]

I don’t see how that has anything to do with starting a business.

OP's post includes "And I'm more or less concerned about legally and tax wise and anything related to 'household' income etc..."

I was questioning if he is a tenant, or a member of the household, or... if the family is supporting him, and he is a dependent, then there might be a tax implication on the household. If he is self-supporting, filing separately, then it is less likely to have a tax impact on the household.

 

[quincy]

OP's post includes "And I'm more or less concerned about legally and tax wise and anything related to 'household' income etc..."

I was questioning if he is a tenant, or a member of the household, or... if the family is supporting him, and he is a dependent, then there might be a tax implication on the household. If he is self-supporting, filing separately, then it is less likely to have a tax impact on the household.

Ahh. I see. Laney D said s/he’s single and not claimed as a dependent on his/her family’s taxes.

 

[Mark_A]

Is he a dependent or a self-supporting adult?

He (or she) said above:

"family doesn't claim me on thier income tax. I actually work a part time job and do get my taxes prepared by a cpa."

 

[quincy]

The information provided in the earlier link is pretty thorough and there are some free resources available to anyone setting up a business for the first time.

 

[Mark_A]

OP's post includes "And I'm more or less concerned about legally and tax wise and anything related to 'household' income etc..."

I was questioning if he is a tenant, or a member of the household, or... if the family is supporting him, and he is a dependent, then there might be a tax implication on the household. If he is self-supporting, filing separately, then it is less likely to have a tax impact on the household.

I explained above in a previous comment that if the household relative is making more than $5,200 per year of income, they cannot be claimed as a dependent on someone else's return. However, the OP said that he/she is not being claimed as a dependent. If the person was a child then a qualifying child can earn any amount of income and still be claimed as a dependent, as long as they don't provide more than half of their own financial support.

I also mentioned previously that if the OP is paying rent, the person receiving the rent should include that in their income (and offset that income with a percentage of the expenses of running the home such as utilities, taxes, and possibly depreciation), but that is not dependent on the income of the renter or whether the renter starts a new business.

 

[LdiJ]

I am not seeing how that has anything to do with starting a business.

It has to do with his original question.

"So my question is since living with someone ( has been for about 5 years) what implications ( if any) are I/ we might face with me starting an online sales business as a sole proprietor And I'm more or less concerned about legally and tax wise and anything related to 'household' income etc..."

For example: If you are on food stamps and Medicaid, and your 16 year old dependent child starts having a part time income of their own, that does impact your food stamps and Medicaid. If your adult child lives in your household and you have Obamacare, then your adult child's income factor's into your insurance premium.

There are other areas as well where a dependent or household member's income factors into things. That was part of the OP's original question.

 

[quincy]

It has to do with his original question.

"So my question is since living with someone ( has been for about 5 years) what implications ( if any) are I/ we might face with me starting an online sales business as a sole proprietor And I'm more or less concerned about legally and tax wise and anything related to 'household' income etc..."

For example: If you are on food stamps and Medicaid, and your 16 year old dependent child starts having a part time income of their own, that does impact your food stamps and Medicaid. If your adult child lives in your household and you have Obamacare, then your adult child's income factor's into your insurance premium.

There are other areas as well where a dependent or household member's income factors into things. That was part of the OP's original question.

Right. And any or all of these are addressed in the information provided in the link.

We cannot on this forum hope to answer all of the “what ifs” which is why directing a poster to those who can answer the specifics is important.

 

[LdiJ]

Right. And any or all of these are addressed in the information provided in the link.

We cannot on this forum hope to answer all of the “what ifs” which is why directing a poster to those who can answer the specifics is important.

Oh I agree absolutely that we cannot cover all "what ifs". It is just that the post of yours that I quoted made it sound like those issues were not relevant to his questions at all. If I misunderstood mea culpa.

 

[quincy]

Oh I agree absolutely that we cannot cover all "what ifs". It is just that the post of yours that I quoted made it sound like those issues were not relevant to his questions at all. If I misunderstood mea culpa.

The answers were relevant only if the correct circumstances were met, which in at least one case, they weren’t (e.g., being a dependent on family tax return). It is best to go over everything with someone who has access to all of the facts.

 

[Mark_A]

For example: If you are on food stamps and Medicaid, and your 16 year old dependent child starts having a part time income of their own, that does impact your food stamps and Medicaid. If your adult child lives in your household and you have Obamacare, then your adult child's income factor's into your insurance premium.

There are other areas as well where a dependent or household member's income factors into things. That was part of the OP's original question.

OP said they are a family member, but not a child, of the people the OP is living with, and also stated that they are not declared as as dependent on the tax return of the family OP lives with. Given that, there is no potential impact on the family the OP is living with in regard to calculation of any "household income" if OP starts their own business run from that home.

 

[LdiJ]

OP said they are a family member, but not a child, of the people the OP is living with, and also stated that they are not declared as as dependent on the tax return of the family OP lives with. Given that, there is no potential impact on the family the OP is living with in regard to calculation of any "household income" if OP starts their own business run from that home.

You are incorrect about that. There are some things where household income matters, even if they are not a dependent on someone's tax return or not someone's minor child. The most prominent one is Obamacare health insurance. However there are others.

 

[Mark_A]

You are incorrect about that. There are some things where household income matters, even if they are not a dependent on someone's tax return or not someone's minor child. The most prominent one is Obamacare health insurance. However there are others.

The information I have found does not agree with your statement:

Here is the definition of household for Health Insurance Marketplace® (Obamacare):
"tax filer + spouse + tax dependents = household"
https://www.healthcare.gov/income-and-household-information/household-size/

OP has stated that they are not the child of anyone else in the home, nor a dependent (on a tax return) of anyone else (in the home or elsewhere), so they are not included on the household income of the family the OP is staying with. The OP obviously is a member of their own household (by themselves).

As far as things other than Health Insurance Marketplace, I would have to see some evidence before I would believe it.

 

[quincy]

I am confident that the professionals Laney D speaks with will be able to address all business startup questions.