In other words, a DBA is just a trade name that permits a company to conduct business under a name other than the owner’s name or the legal name of the corporate organization. By registering a DBA, John Smith, who owns a sole proprietorship with the name “John Smith Consulting,” could, for instance, opt to run his company under the name “Smith Consulting Group.”
It is crucial to remember that a DBA does not give the business owner any legal protection. Under a DBA, a sole owner or a partnership is nonetheless accountable for the debts and obligations of the company. All state and federal laws governing LLCs still apply to LLCs that operate under a DBA name.
The proprietor of a company that uses a DBA is not regarded as a seller in QuickBooks. Vendors are people or companies who supply the business with goods or services. Depending on how the business is set up, the owner is either regarded as an employee or an owner.
The owner would have to establish a new customer record and enter the DBA name as the customer name in order to set up a DBA in QuickBooks. This will enable the owner to keep track of DBA-related earnings and costs independently from other business operations.
A Form 1099-MISC must be filled out if a business owner made payments of $600 or more to a vendor who uses a DBA. The vendor’s legal name, tax identification number, and DBA name should all appear on the 1099-MISC.
Before making any payments, the owner should ask the vendor for a W-9 form in order to confirm the accuracy of the 1099-MISC. The vendor’s legal name and tax identification number, which are required for reporting purposes, will be provided on the W-9.
In conclusion, a DBA is not a specific kind of entity but rather a trade name that a company uses to conduct business under a name different than the owner’s or company’s legal name. Payments to vendors who operate under a DBA must be reported on a Form 1099-MISC with the DBA name included since the owner of a company that uses a DBA is not regarded as a vendor in QuickBooks.