Freelance Design & Business

Discussion in 'Small Business Helper' started by SD_Ryoko, Apr 26, 2005.

  1. SD_Ryoko

    SD_Ryoko <img src="\usflag.gif" align="left"/>&nbsp; Admini Staff Member

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    As you may know, I have been doing some contract web work on the side of things.

    Does that make me a business?
    Do I have to claim checks as income this year?

    I wanted to make a web page and a business card to represent myself.

    Now am I a business? Do I have to file as a business? What does that involve?
     
  2. tsbhelper

    tsbhelper Small Business Helper Forum Moderator

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    SD Ryoko,

    Yes, you are a business.

    Yes, you have to claim the checks as income this year.

    What this involves is 1040 Schedule C, Profit or Loss from Business amd 1040 Schedule SE, Self Employment Tax. Recommend you use Turbo Tax for your tax preparation. It will guide you through all of the complexities of these forms.

    Welcome to the world of business!

    The Small Business Helper
     
  3. SD_Ryoko

    SD_Ryoko <img src="\usflag.gif" align="left"/>&nbsp; Admini Staff Member

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    Am I going to lose a lot of money on that.....more than I already do on income tax (27%)

    Do I have to register with anything as a business too? And have a .... name or something?

    Thats a lot of work for some web page stuff!
     
  4. tsbhelper

    tsbhelper Small Business Helper Forum Moderator

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    SD Ryoko,

    Don't know whether you are going to make or lose money. You need to escrow (save) at least 50% of the money you take in for this side business. This will cover any eventualities (including taxes) that will occur. Likely you will make money unless you spend it all as soon as you get it.

    My recommendation for small business startup is to minimize your risk as much as possible. Start small, work out the problems, see what the potential is before you make any decisions that involve larger sums of money and higher risk. Don't quit your day job until you have a pretty high level of confidence that you can succeed in business for yourself.

    You are currently doing business as yourself so you don't have to register a DBA unless you decide to use a business name instead of your own. As I said before, you don't have to decide on a business name and register until you have gotten enough experience with what you are doing to be able to make the decision to actually make it a business. You are trial marketing and working out the bugs right now. Recommend you keep it simple and straightforward. Don't complicate things any more than you have to.

    The Small Business Helper
     
  5. SD_Ryoko

    SD_Ryoko <img src="\usflag.gif" align="left"/>&nbsp; Admini Staff Member

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    Understood, this is just extra me-money.

    OK! But I still have to do those forms, right? I probobly go to H&R.

    Well good thing we have The Small Busniness Helper!!!!

    My first client kinda went under. Bad sign? Need new customer....hmmm.

    So, I thought the best way to get some new clients is to make a nice looking web site for myself. Web work sells itself. But then I would need some type of company name or something on it. But I agree - I don't want to go full blown business yet.

    Can I put a name on it, but just do business as myself still? Make checks payable to me? Heh heh.
     
  6. tsbhelper

    tsbhelper Small Business Helper Forum Moderator

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    Sd Ryoko,

    Yes, you have to report your "business" income and expense on Schedule C whether you have a business name or not. If there are any expenses involved in running this "business", you will probably be able to list them on the Schedule C as well, and deduct them from your income.

    Yes, you can use a business name without registering it as a DBA. However, if anyone else is already using it, or has registered it, you will run into problems. As long as you are not high profile with the name, likely you will be OK. Just be sure that any clients you have know they are going to make the check out to you personally and not to the business name.

    BTW, registering a DBA is very simple and inexpensive. Not hardly any paperwork involved worth mentioning, so you should probably go ahead and do it just to be sure you can keep on using it if things work out for you.

    The Small Business Helper
     

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