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  • License for freelance tech work - advice.

    As I am going to be jump-starting my freelance tech business soon, I wondering about getting a license.

    Some say it's good to have, but others said being freelance I don't need it plus being licensed you have to give up much of what you make to Uncle Sam.

    Your thoughts?

  • #2
    Not quite with you. Giving up to Uncle Sam - are you talking about for the licence, or not paying taxes?

    Avoiding taxes is something we can't advocate, and it's pretty daft as Uncle Sam will take that more seriously than other crimes that actually harm people physically.

    Rapscallion

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    • #3
      i haven't heard anything about freelance work requiring a license, a bond wouldn't hurt...unless there is a state statute you are referring to i believe that all you need to do freelance is the knowledge and some sort of company for it, either a llc or the like. but of course ianal
      This is a drama-free zone; violators will be slapped. -Irving Patrick Freleigh
      my blog:http://steeledragon.wordpress.com/

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      • #4
        You'll need 3 things: A Resale Permit, which you get from your state sales tax authority; a city business license; and a fictitious business name filing.

        The Resale Permit allows you to buy things without paying sales tax, and lets you collect the tax from your customer. You'll have to keep records of all your transactions in which you collect tax, and once a year (or quarter depending on your sales volume) file a form and send the money to the state.

        The city business license gets you out of any trouble with running your business out of your home.

        The fictitious business name filing makes sure that the name you choose for your business isn't duplicated by someone else.

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        • #5
          Technically you won't need a a FBN (Fictitious Business Name) if you work using your own name. So if you were to call it say "sld72382 Computer Repair" you wouldn't need the FBN.

          Unless you are reselling parts at a profit then you will not need a a resale permit (this is required for selling tangible goods, not untaxable services).

          As for the City Business License, this is normally required for where the work is to be performed. Say you live and work out of city A and you go and do a job in city B, then techincally you would have to have a license for city B as well. I have never seen this enforced though.


          Mind you these are all for Ventura California, Please check with the requirements in your neck of the woods as tax and business laws change by locality.

          Oh yeah, I would do the insurance as well. It can be expensive, but then again if you fuck up a clients computer so can the law suit.
          Last edited by digilight; 01-06-2009, 10:09 PM. Reason: insurance suggestions
          My Karma ran over your dogma.

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          • #6
            Really, the law varies in every state, and sometimes every town.

            Generally you need to be registered as a sole proprietor (simpliest tax - what you make is taxed and that's it -- but also applies to some other business structures, and depending on number of owners/shareholders/etc) -- and everything else (assuming you do the min. in your area for taxes/etc) is just to cover your butt.

            A lot of times it's easier to ask a lawyer or tax preparer (sometimes they'll tell you what you need for nothing -- I had a laywer print off required forms for me and said "look, I can fill it out for you and charge you $500-1000 or you can put X yere, Y here, sign here and not have to pay anything to me).

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            • #7
              Yeah its always differnt:AZ

              You are supposed to have a business licsence for each city you do work in: but just having one for the city your business address is works fine for the state
              Since I personally do only services no parts or custom builds, I have no taxes to pay and since im the only employee I don't have to worry about reporting employees
              (if a cu wants a custom or needs parts, I print them out a form they can take with them, and get the parts needed. usually I tag along with the cu, so they get what they need, they pay the store, and i was just there to advise the cu)
              My company is listed as sole proprietor (sp?) at the moment, but when I can im having it registered for LLC (Limited Liability Corporation) to protect my personal assets if something bad happens, plus I have 3 forms a customer must fill out prior to repair.


              wow that's a lot of info... sorry for length PM if you wish to learn more, guy whom is sit next to in my normal job has had his company like that for 10 years.
              Crono: sounds like the machine update became a clusterf*ck..
              pedersen: No. A clusterf*ck involves at least one pleasurable thing (the orgasm at the end).

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              • #8
                Don't you need to get a business license to file for a Tax ID? Or is it the other way around? I don't rememeber.

                CH
                Some People Are Alive Only Because It Is Illegal To Kill Them

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                • #9
                  Quoth crashhelmet View Post
                  Don't you need to get a business license to file for a Tax ID? Or is it the other way around? I don't rememeber.

                  CH
                  Some business organizations... oh wait... now I can't remember which comes first.... I thought it was business being filed first, but then I remembered that I had to put my FEIN on the business form - but I also had to put the business name (I thought) on the FEIN application.

                  But I do remember you need a FEIN/Business registration forms first before you can get bank accounts (at least at my banks).

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                  • #10
                    If you are set up as a sole proprietorship you don't need a FEIN (Federal Employeer ID Number) for tax purposes, you can use your Social Security Number.

                    Your business License is a local document from your local city (Or county if you are in a unincorporated area).

                    For the bank account you would need to have the FBN (Ficticious Business Name) and I don't remember about the business license on this one. Now if you are just using your name for the business then you can bypass needing the forms for a bank account. Just set up an account in your own name (keep it seperate from your personal finances though)
                    My Karma ran over your dogma.

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                    • #11
                      ah today I checked, for a 'business' class bank account you have to have a govt EIN (avail for free at IRS.gov DO NOT use IRS.com they charge. ) but unless your brining in large ammounts or a lot of cash each month its not worth it to have a business bank account.
                      Crono: sounds like the machine update became a clusterf*ck..
                      pedersen: No. A clusterf*ck involves at least one pleasurable thing (the orgasm at the end).

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