Building Your Birth Business: Registering Your Birth Business

Written by: Jess Kimball

Registering Your Business

It can feel intimidating to register your business, but it is a step that is important to take early on. Registering your business allows you to begin earning funds, but does not actually require you to begin working. The benefit to registering early is the possible tax write-offs. If you register after purchasing your business supplies you might not qualify to write them off. One of the firs things to consider when registering your business is what your business structure is.

What is your business structure?

  • Sole Proprietor: A sole proprietor is not required to hold annual meetings or record meeting minutes. A separate business tax return is not required to be filed but rather, owners report business profit and loss on their personal tax return. No state filing is required to form a sole proprietorship but some counties may require a form to be filed. Your personal assets may not be protected if you operate as a sole proprietor and a lawsuit is filed.
  • DBA: DBA stands for “doing business as”. If you are operating as a sole proprietor but want to have a business name you can register a DBA. I could choose to operate as “Jess Kimball Wellness” instead of just “Jess Kimball” if I registered “Jess Kimball Wellness” as a DBA.
  • Partnership: A partnership is similar to a sole proprietorship but involves two or more people or organizations who agree to share profit and loss. It is the only entity that can be formed by an oral agreement. A partnership is not required to hold annual meetings or record meeting minutes No state filing is required to form but some counties may require a form to be filed. A separate business tax return will need to be filed. Owners also report business profit and loss on their personal tax return. Owners are personally liable for lawsuits filed against the business, but a good umbrella insurance policy can help mitigate some of the risks.
  • S Corporation and C Corporation: A corporation is a legal entity that is created to conduct business. It is more complex and expensive to form and operate than most other business structures. A corporation provides an independent legal structure separate from the owners, and therefore the assets of the owners are protected. The corporation must file its own tax return as well as hold annual meetings and record meeting minutes. There are two types of corporations: a C corporation and an S corporation. Whether the tax is paid by the corporation or by the owner on the owner’s personal tax return will depend on the type of corporation you choose. The downside of a corporation is the cost to form and the extensive record-keeping that’s required as well as higher accounting and tax preparation fees.
  • Limited Liability Corporation: A limited liability corporation (LLC) is a hybrid between a partnership and a corporation. The LLC is an independent legal structure that is separate from its owners which allows for personal liability protection. Owners are not required to hold annual meetings or record meeting minutes. An LLC is taxed much like a sole proprietorship if the business has a single owner and like a partnership, if the business has multiple owners or the LLC can choose to be taxed as an S corporation. One of the downsides to an LLC is the cost of formation. While many suggest becoming an LLC, there are seven states (Alabama, California, Kentucky, New York, Pennsylvania, Tennessee, and Texas) that levy franchise tax on LLCs which may make this type of entity cost prohibitive.

Other Business Formation Considerations:

  • EIN: If you do choose to start as a sole proprietor acquire an Employer Identification Number (EIN) number from the IRS. Sole Proprietors are not required to obtain an EIN but having one will keep you from having to give out your personal social security number (SSN) for business dealings.
  • Put Everything in Writing: Protect yourself by creating written agreements and contracts. In the event that a legal dispute does take place this will protect you and save you financially. When networking do not be afraid to use a nondisclosure agreement. It is great to have a community of birthworkers working together, but you do not want to see your ideas stolen and someone else making an income from them.
  • Think about investing in general liability insurance for your business.
  • Avoid Legal Expenses and Protect Yourself: One of the biggest financial investments you can make is protecting yourself legally. You never know when someone might decide to sue because you did something that maybe you thought was okay, but they thought wasn’t. To protect yourself legally invest in a consultation with your lawyer to make sure your contract/agreement keeps you protected. Some parents do not know the laws in their state about nanny cams. You may want to ask about that. You are self-employed, what are you doing to provide yourself with sick days? If you take a 100-hour postpartum contract or larger will you write in a paid sick day? If your client experiences a loss will services be transferred over to bereavement care, saved for a future pregnancy, or refunded? Things happen that we don’t want to think about. In order to protect yourself you need a solid agreement/contract on the front end as well as insurance to protect yourself while you provide care. Having a contract helps you in more ways than one when it comes to finances. It can be hard to discuss rates with clients. Your contract is a great way to ease that. When you meet for a consultation go over the contract line by line. One of those lines will be the financial agreement. This can make it feel like a natural transition into the topic of what your client’s investment is.
  • Consider Tax Write Offs: There are so many things you can write off as a doula when it comes to tax deductions. These write-offs will maximize your tax return at the end of the year. It is important to keep records of these purchases. Make a folder in Google Drive or on your computer and save copies of receipts here as well as a spreadsheet with an itemized list and total of your write offs. You can also use that spreadsheet to track mileage from clients. Mileage is a write off!

Possible Doula Write Offs:

  • Continuing education
  • Mileage
  • Website hosting
  • Books
  • Office supplies
  • Office space (you can even write off a home office space)
  • Uniforms
  • Advertising
  • Certifications
  • Courses
  • Scheduling software
  • Parking
  • Tolls
  • Car
  • Car maintenance
  • Car insurance and registration
  • Business meals
  • Travel lodging and expenses
  • Home office supplies
  • Power bills, property insurance, water bill (use form 8829)
  • Wifi
  • Liability insurance
  • Handouts, lotions, oils, other supplies

Do you meet clients for coffee initially? That coffee can be written off. Did you purchase supplies to teach childbirth education? You can write that off. It is important to decide on a business model and register it early on. This allows you to deduct more on your taxes, such as your training and education. You cannot deduct these as business expenses if they took place before you actually had a business. Register your business early and keep track of all expenditures. Next, we will be discussing setting your rates and the nerves that may come with charging your worth!

At Global Foundation for Girls (GFG), we are active thought partners, serving global communities of birthing persons in order to advance and support the advocacy movement. Our networks serve Black and brown girls (trans or cis) and gender-diverse youth survivors of sexual violence, retributive (corrective) violence, assault, obstetric violence, birth injustice, discrimination, or disenfranchisement due to their gender, race, sexual orientation, gender expression, faith, ability, or other identity markers. This demographic likely includes youth from low-income neighborhoods and varying language skills and immigration statuses. Our team is made up of birth advocates, many of which are birthworkers, from all over the world.

Jess Kimball, AS, CLC, CD, PCD, PMH-C