Freelance Work

[jlvkfyang]

I do some freelance IT work. Usually I have worked on things for friends and family, and it comes to a few dollars here and there. Now, I might have the opportunity to provide some major work for a company in town.

I was just wondering, what might i need to do. Do i need a business license, should i ask for a 1099. What suggestions does the forum have for me so that I don't get myself into trouble, ie. taxes, liability, business status, so on and so forth. Thanks a bunch.

[sweeps]

Check local and state laws, but based on my experience:

No, you don't need a license. You don't even need a business name unless you want to set up a corporation. An annual 1099 from the company is nice, but not required. Keep copies of invoices and checks for tax purposes. Make sure you have a signed agreement with them what you are getting paid to do, how much you are getting paid for it, etc. Do a google search for an independent contractor agreement form template. It will provide some liability protections for you (and for them). You may still want to consider professional liability insurance just in case.

If you start making some big bucks, you may want to consider incorporating. Also you should look at retirement plans -- SEPs, Solo 401k's, etc.

[Joan.of.the.Arch]

If you live in my city you need a business license for almost every money-making endeavor except "the professions" or being an employee. But the licenses are quick and inexpensive to get.

[mom-from-missouri]

I'd say you will need a license if you live inside city limits.

Even my small town of under 2500 requires a business license if you do anything for profit-including show removal, selling eggs, childcare. Even a garage sale requires a temp 5 day permit (cost $10). kind of a pain but they fine you if you don't have it. And, the local PD gets a print out of who has them for garage sales--if they see a sign up or a sale that isn't on the print out, they ticket you--its around $125 fine. Our city hall also checks the paper for ads and calls to see if people have a license. (It all makes it to the police blotter in the paper)

[CreditExpert]

If you live in my city you need a business license for almost every money-making endeavor except "the professions" or being an employee. But the licenses are quick and inexpensive to get.

thats true, licences are quick and cheap....aslong as you go about the right approach to get one.

[vsjhoc]

You might also need a license to conduct this business out of your house (even if all you are doing is sitting at a computer and not running a b and b).