Business Lisencing

[kevincdg]

Do you need a business lisence to freelance, or does this vary by state/city?

I'm confused at how it works.

If you freelance and do work for a client, then they go to claim it on their taxes '$3,000 to so-so for web' as a business expense of whatever, do you have to have a business lisence for it to be valid or what?

Any insight on this problem is helpful. I'm located in Reno, Nevada, if that helps anyone as well. Probalby not, though. :)

Thanks!

[CkretAjint]

I tihnk is varies per state/how much you pull in each year 'freelancing'. Contact the local state dept and ask them for some information...

[Drazan]

Contact your secretary of state.

The main reason you would need a certificate of assumed name is if you are not using your name in your business. For example if I use "Hot Designs" it does not use my name in it, therefore I'd be required to register the name for commercial use.

Also, you can leagally use your name (at the very least your surname) in your business name.

Your client is giong to claim the expense no matter what. You need to claim that income on your taxes and whether or not you have a business name doesn't really matter to the IRS.

I have a registered name since 1998, I've actually used that to convince a few clients that I'm here to stay, that I'm not a fly-by-night prospector, and yes, I'll still be here 3 years down the road for the next rebuild of the site.

There's quite a few threads around here that deal with freelance business, might want to do a search here on "taxes" as well.

Jade

[PrintDriver]

If your client is paying you more than $600 in a year, they HAVE to issue you a 1099 for US Income Tax purposes. Blame the nannies.

I think, but I'm no tax law specialist, that you may want to register to avoid the 'work for hire' part of copyright claims. If you are freelancing as a registered business you are providing a 'service'. If you are freelancing as yourself you may be determined as a temporary employee and lose your rights to any work while 'employed' that you may have meant to keep. If it comes to an argument.

The amount may vary from state to state in regards to state taxes. It may be the state Treasury site that answers your questions rather than the Secretary's office. That seems to vary from state to state too.

But, I'm no tax law specialist.

[tuliptree]

^ What they all said. Definitely check with your secretary of state. In Ohio I had to pay $50 to register a fictitious name for my business as a sole proprietorship through the SOS . If I used just my name, I would not have had to, but like Drazan said, it helps establish your legitimacy as a business. That also allows you to open a business bank account if you want to do that (you would bring in your license as proof at the bank if you are using a fictitious name). Also check locally just to be sure you don't have to do any paper work with them (probably not, but that's only based on where I am, I didn't have to do anything local).

[kevincdg]

Thanks for everything. I ended up talking with a buddy of mine at my in-house job and he explained it in a more general term then you guys. He also told me about the W-9 i'll have to file at the end of the year.

My freelance business name was going to be Mr. Jones - My name is Kevin Jones. I wonder if that would be considered a 'business name' rather then just my typical name. Probably, the way our government works.

Thanks for everything guys! Much help as always. :)