Got a freelance web design project, do I have to declare myself as a business (US)?

Question

Friends of relatives would like me to design their business website. Do I have to go to the city hall and open/declare myself as a business?

I am not planning to go freelance full time, but would just like to earn some money on the side.

Also, what about taxes?

Answer 1

You'll be a independent contractor... Basically when you file your taxes you will need to be prepared to give back about 1/3 of your income to taxes & Social Security... You SHOULD get a 1099 from the biz for your taxes. You don't have to start up a business - there are a lot of costs incurred with doing that - but some day you might want to.

For now, put at least 1/3 of every dollar you earn away for taxes and track all of your expenses that could be related to your doing work independently (milage, phones, internet, software, computer, etc). The more you can deduct for expenses the less taxes you have to pay - which is a good thing! But be sure to document everything... if you're tracking milage - make sure you know how many miles are driven for fun, your regular job and for your freelance work. Make it either written or electronic so that you can prove what you've done.

Good luck - and track everything!!!!

Answer 2

The company who only charges $500 probably outsources to diffrent countries where labor is cheaper. OR they already have a pre-made template and they restrict big customizations so they don't have to take up too much of their time to modify the site. I think you're in the right track but if I were you, I'd ask your local web design companies too. Rates are different depending on the area.

Answer 3

No, you don't have to declare yourself as a business. But you will have to report the income on a tax return, and pay income tax on it - for tax purposes you'll be considered to be self-employed for this job.