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Old 21st February 2006, 10:01 PM   #1
linkjg
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Default How to start small business based on freelance work??

Hello,

This is my first post on the board, and I apologize if this is the wrong forum to discuss this!!

I have a regular job, but I've been doing freelance web design off and on for the past year. I do not make enough with the work to quit my job, nor do I want to quit my job and pursue this. It's more like a side hobby.

I was told that I should start my own business, for tax purposes. I have NO IDEA how to start my own business or what I would even set myself up as (LLC, INC, etc.) My only purpose for the business is for tax purposes and to be "legal" for any clients I have.

Can any of you give me some advice to what you've done?? Any freelancer out there who could be a mentor?

I appreciate your help!

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Old 21st February 2006, 10:40 PM   #2
ACRNYC
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For you, the best way to go would be sole proprietorship. Very simple to set up, and you can even combine your taxes with your personal taxes/1040 at the end of the year. S-Corps, C-Corps, LLC's, etc., have way too much maintenence and set up for you to worry about. A sole proprietorship is simple, affordable, but will keep you "legal."

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Old 22nd February 2006, 09:52 PM   #3
linkjg
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ACRNYC,

Thanks so much for responding to my post. I'm located in Tennessee, so I was trying to do some research online about how to register for the business. I found this page: http://www.tennesseeanytime.org/bizreg/index.html that seemed to offer info about business registration, but I'm not sure what classification I'm under... Would I be Franchise and Excise Taxes or Sales and Use Tax??

Do you know? Or is this something I don't need to know about for this?

I also found this info:

Sole Proprietorships. In general, sole proprietorships in Tennessee can be formed with no formalities. However, as discussed in Section IV(b) below, it will generally be necessary to obtain one or more local business licenses from cities or counties in which you operate and, in some cases, state licenses, as well.

No separate state income tax filing is required, generally, for a sole proprietorship operating in Tennessee, since there is no general state income tax in the state, only the Hall Income Tax, a tax on dividends and interest income of individuals.


Last edited by linkjg; 22nd February 2006 at 09:55 PM.
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Old 23rd February 2006, 03:45 PM   #4
a1steelbuilding
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Sole proprietorship is easy, but just be careful since it does not provide the protection that an llc or inc would. If someone sues you for your work you could lose everything.

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Old 2nd March 2006, 11:36 AM   #5
linkjg
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Default Do I need a business license because of profit??

I was reading about state taxes today and came across this:

EXEMPT BUSINESSES - Businesses that gross less than $3,000 a year are exempt.

Does this mean that I do not need to get a sole proprietorship since I do not make more than $3,000 a year?!

Any advice out there?

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Old 2nd March 2006, 12:30 PM   #6
jvance
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I agree about the sole proprieter business set up.

If you are looking for places to bid for web projects, try www.elance.com. There are lots of potential customers who post their projects there. All you have to do as a freelancer is bid on them.

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