do i have to form a business entity?

Question

I've just started working as sort of a part-time contracter doing design work for a national firm. I plan on turning a room in my house into a home office, and purchasing a notebook to perform my work on (regular and exclusive use, etc.).

Do I become a sole proprieter by simply filing a Schedule C on this year's tax return?

Answer 1

You will automatically be a sole proprieter unless you choose another business entity.

Answer 2

Yes, you can simply become a sole proprietor. This leaves your personal assets open to being taken if you get sued. A safer form is a LLC Limited Liability Company which shields your assets if you make a mistake, or a corporation.