I’m thinking of doing this on the side to make some extra money. I’m currently a sahm. I have expertise in marketing and Project Management. I think I can help many small companies and even big ones. I just don’t know what I need to do…besides the above questions…I live in nassau county, ny.
1. How i do business as (i.e. freelancer or consultant) matter to IRS? Do I need to register it (if so sole proprietorship is my only option now)
2. Is it best to use my own name or use a business name (i.e. Reliable Marketing as an example) …(doing business as name).
Depending on this, i’d like to take the necessary steps…
From a IRS standpoint, you can go into business very easily as a sole proprietor (which is the same as a freelancer or a consultant). You will be self-employed – in business for yourself. Once you have the intent to be in Business, you are in business. Keep track of all your income and expenses, including mileage (58.5 cents/mile now). If you have a profit, you will have to pay both income tax and social security tax (about 15%) on it. If you have a loss, it will lower your taxable income. A sole proprietor is reported on Sched C on your 1040, so there is not a separate tax return or registration for it.
If you use your own name, you may not have to register in your city or county. Otherwise, you may have to register as a D/B/A (doing business as) in your locality. You must check your city and county.
This is much too long and complex to discuss fully. As always, consult with a tax professional for specific answers. CPA Greg