What Is a DBA IRS?

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What is a DBA and its Purpose?

A DBA means "doing business as". Businesses such as LLCs can use DBAs to trade under other names without registering new companies. You register DBAs with paperwork and fees from $10-$100 with county clerks or state agencies. Sole proprietors report DBA income on personal tax returns. DBAs help sole proprietors protect privacy or rebrand parts of businesses. Texas doesn’t require DBAs for sole proprietors.

Differences Between DBA and EIN

DBA vs. LLC: Liability Protection

  • The biggest difference between a DBA and an LLC is liability protection. Under a DBA, there is no distinction between the business owner and the business. The business owner is liable for all expenses incurred on behalf of the business. On the other hand, an LLC provides limited liability protection.

Tax Implications of a DBA

Benefits of Registering a DBA Name

  • Filing a DBA gives the sole proprietor the freedom to use a business name to market their products or services and create a separate professional business identity.

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