American living in Italy running internet biz w/ inventory i

lappyhappy · Guest

Hoping someone here can help!

My business - I buy and sell secondhand equipment entirely online
(completely web-based business.) I just moved to Italy from the states
about a month ago (I'm living here permanently.) I just hired an
employee to handle my inventory/shipping/receiving who lives in
California. I also have some help in Maryland in the form of my family
which is also where I'm from. I have also recently expanded into
several diverse websites that are starting to bring in a profit (this
is different than the "online business" I mentioned because there is no
inventory - just websites.)

Problem - I want to become a legitimate business and do everything
legally (for the past year or so I've had to just estimate my earnings
and i haven't been an licensed business.) I want to pay taxes and be
legitimate, as well as be able to receive payments in the name of the
business. I tried becoming a license business on several occasions but
I let them expire or didn't keep up with the paperwork because of
several reasons:

1. since i was operating entirely online and out of my house, it didn't
make sense for me to pay for a license w/ the city/county/state and do
all the paperwork affiliated with that. (technically, my business is
located on the internet, so really my only obligation is to the federal
government. i know my office was in a particular state, but i highly
doubt there is any state/county/city department that gives a damn about
me doing business on the internet in the privacy of my own home with
nobody even in my own neighborhood knowing about it.) not to mention
the fact that when i inquired about setting up an internet business at
the county and city clerks offices, they looked at me with that "what
is the internet" look. i figured i was better off on my own.

2. i claimed earnings under my ss#, but i seem to recall hearing that
since i'm beginning to make some decent money i need to file as a
business instead of just "earnings from somewhere getting filed under
my ss#"

Problem #2 - I now live in italy. I have income from websites (no
physical location other than "the internet"), as well as the original
business I started which involves inventory. This inventory is kept in
california, some in italy, and some in maryland (i have helpers in CA
and MD)

Some more points:
1. i think it's best to be a sole proprietor at the moment, yet i'm
curious about becoming a LLC because my businesses are not slowing down
and will soon be quite large with many cusotmers and possible legal
issues someday
2. i want to avoid paying huge taxes if possible (naturally), but my
first priority is that i want to be legit. can i set up my business
offshore somehow and not have to pay taxes or at least a lot less? i am
an american citizen, but i live in italy, i run my website businesses
from my office in italy and my inventory for my online store is kept in
california and maryland.