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Business license and taxes for freelance work?
Beltaine
BOO BOO DOO DE DOORegistered User regular
BOO BOO DOO DE DOORegistered User regular
So, I came across an opportunity to do some freelance work for some local newspapers. It would involve some graphic design/photo editing and I would be compensated for my time.
The guy I spoke with about it suggested I set up a business. Partly for my sake to keep up with things like income tax, and partly for his sake because him paying out to an individual rather than another business makes things more difficult for his bookkeeping.
Does anyone else do something like this and can offer some advice on how to go about getting things in order?
The guy I spoke with about it suggested I set up a business. Partly for my sake to keep up with things like income tax, and partly for his sake because him paying out to an individual rather than another business makes things more difficult for his bookkeeping.
Does anyone else do something like this and can offer some advice on how to go about getting things in order?
Beltaine on
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Do you have a job on the side? If this is a thing where you make big bucks taxes become interesting as you pay quarterly instead of at the end of the year.
I found paperwork for a business license on the state website. I'm guessing this is just going to be a sole proprietor type thing as something like an LLC looks way more complicated.
PSN: Beltaine-77 | Steam: beltane77 | Battle.net BadHaggis#1433
Tax wise, since you already pay taxes in your paycheck (hopefully!), you can just tack on what you make through your DBA at the end of the year when you do your paperwork. Keep records of it. Grab quickbooks, keep receipts, etc.
The first thing we did is file for sales and use tax, which not only lets us collect sales tax on anything we sell, but also lets us not pay tax on materials used for resale. (like, the t-shirts we buy to get images printed on, for instance)
Second, we had to file both city and county business licenses, but you also might not have to do this if you don't make X amount within a calendar year. (for TN it was like three grand)
Third, we had to get a Federal Employee ID number for any federal taxes. This was kind of optional, because technically if we're just filing as a partnership (my wife and I) we can use one of our SSN's instead, which we found out after the fact.
It's a LOT of paperwork and if you aren't careful you can get fucked on taxes. Like Bowen said, get quickbooks, keep receipts, and at least for the first few years, if not always, hire an accountant.
Because if you setup as a business, you get to expense anything remotely related to the work you're doing. Buy a camera? Expense. Get lunch? Expense. etc. etc.
As long as you don't make 3 years of losses (I think), you can expense the crap out of something's that's somewhere between a hobby and a job.