Unemployment Benifits & Starting a business NJ (New Brunswick, Livingston: purchasing, taxes)

[dklotz]

I was unemployed back in February of last year and at that time I decided to register and start my own business selling decals. After all of my costs I was only making less than a few cents off of each decal and I was not selling much per week. Recently my business took off unexpectedly and I spoke to a few people who I thought were knowledgeable in unemployment and they said not to worry about clamming the small amounts on my unemployment. But now reading online I am worried that I will have to pay back unemployment. Is there anyway I can claim what I have earned without getting in trouble. I am still making less than my earnings per week after taxes and I have been actively seeking Jobs at the same time. Since my business is not making even close to enough to pay the bills. It is an LCC and I have not paid myself a paycheck as of yet since I was looking at purchasing some equipment this year that would at this point use all of the money I have earned so far with the business. I am going to start claiming what the business makes per week starting my next claim. So does anyone know what I should do?

Thanks

[ocnjgirl]

I would ask this on the unemployment forum (under Work and Employment)

[RobRiguez]

I know very little about UI. But i HAVE recently started my own business and have had a crash course in the process.

You meant LLC right? This is VERY important!!!! If you created a "Sole Proprietorship" you are SOL.

An LLC is a separate legal entity, that you own. Any money made under an LLC belongs to the LLC, not you. The only money that is yours is the money taken out of the profits as an "Owners Draw". To make all of this work I hope you set things up correctly from the start to keep everything separate. Separate "Business" bank account in the business name, NOT YOURS. Only ever depositing any money received into that account, NOT YOUR PERSONAL ACCOUNT. If you have Paypal or CC processing, it was all setup under the LLC, NOT YOU. Keeping meticulous accounting records of every transaction, every expense, every receipt. Never using your personal accounts to pay for anything business related etc, etc.

So, because everything is separate, because you have never taken any money out of the business, because you have reinvested any profit, YOU have earned nothing. Since you have earned nothing, there should be no issues with UI.

Having said all of this, I would check with the your local Small Business Bureau office. NJ has a few of them around the state. The one by me is in New Brunswick (Rutgers Livingston Campus). They have something called the "Self-Employment Assistance Program". You need to apply, there are qualifications, there are required seminar and classes you will have to take but, it might provide an out if you did get audited by UI Dept.

Good luck.