I'm completely new to this and learning, but can't I just offer my services and then file my taxes as an individual using my social security #?

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www.carmenolivo.com

Carmen,

How you set-up your business is a personal decision and completely up to you. You could set-up a Sole Proprietorship, a LLC, or a Corporation (S-Corp or C-Corp). But I would set-up a business.

I would not recommend using your SSN. (It is really not smart to give your SSN to anyone these days, and if you operate as an individual you will need to give your SSN on your W-9 to the companies you work for so they can send you a year-end 1099.)

If you are going to be Sole Proprietorship, then I would recommend going to the IRS website and applying for an tax id number in your business name, and not use your SSN for your business tax id. (This process is very easy. Just make sure to apply for your business name first. --See below.)

Furthermore I would make sure you go to your local Corporation Commission or Secretary of State website and apply for a business name/Trade Name. (Using a business name is more professional, and safer. I would use a business name as opposed to your personal name.)

Hope this helps,

Julie

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Julie | Virtual Resource Services, Inc (VRSI)
http://www.vrsioffice.com

Originally Posted by Carmen Olivo

I'm completely new to this and learning, but can't I just offer my services and then file my taxes as an individual using my social security #?

If you are a freelancer or "self contractor" i.e. independent contractor, this is considered self-employed income and subject to self-employment (SE) taxes, therefore you would need to be setup as a business. Maybe think of it this simplified way: income comes from either being a self-employed business owner or from W-2 income as an employee. Self-employed, you pay your own SE taxes for your business income. Employee that gets a W-2, your employer withholds and pays taxes for you from your paycheck.

Some helpful information from the IRS on starting a business.

The other Julie gave you some good information on what types of business entities there are. I've always been a sole proprietor and file a Schedule C as part of my 1040 tax return. You can use your social security number, but I also agree that you should get an EIN (FTIN). More info here on how to apply, etc.

HTH a bit,

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Jules, SunRise Virtual Solutions - WordPress Customization & XHTML/CSS Web Sites

This article, "The Top 5 Reasons To Avoid Sole-Proprietorship" pretty much says it all!

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Lily Chambers, The Virtual Office Goddess, LLC
Author "How to Do Your Own Small Business Bookkeeping"

Lily,
Great article. I could not agree more. This is why I always set-up a C-Corp or a S-Corp. You can never be too careful!

Thanks,
Julie

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Julie | Virtual Resource Services, Inc (VRSI)
http://www.vrsioffice.com

Originally Posted by Office Goddess

This article, "The Top 5 Reasons To Avoid Sole-Proprietorship" pretty much says it all!

Great article, Lily. My concern, and one that has held me back, is the requirement for a registered/resident agent. I don't want to be tied down to my office from 9 - 5 every week day (and don't think I could assign one of my kitties ). Not so sure I'd want to go with a nationwide registered agent service as an option either.

Thoughts?

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Jules, SunRise Virtual Solutions - WordPress Customization & XHTML/CSS Web Sites

Originally Posted by Business-Bytes

Great article, Lily. My concern, and one that has held me back, is the requirement for a registered/resident agent. I don't want to be tied down to my office from 9 - 5 every week day (and don't think I could assign one of my kitties ). Not so sure I'd want to go with a nationwide registered agent service as an option either. Thoughts?

That's an interesting requirement and one we don't have in Colorado. Have you talked to someone at your Secretary of State's office about it? i'm wondering if being physically present during work day is a 'set-in-stone' requirement or just having a permanent physical address would address this issue (not to dis the kitties, of course ).

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Lily Chambers, The Virtual Office Goddess, LLC
Author "How to Do Your Own Small Business Bookkeeping"

Wow! why did it take me so long to find this thread! it answers most of my questions, Ug - I'm going to bed! I'm going to sleep good tonight knowing that I'll have to do on Monday to get this business up and running! Thanks!!

I'm sooooo glad I stumbled on this thread , answered my questions !! I love this place !!!!!!

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Mak's VA Services
Magdaline Makris

Originally Posted by Business-Bytes

If you are a freelancer or "self contractor" i.e. independent contractor, this is considered self-employed income and subject to self-employment (SE) taxes, therefore you would need to be setup as a business. Maybe think of it this simplified way: income comes from either being a self-employed business owner or from W-2 income as an employee. Self-employed, you pay your own SE taxes for your business income. Employee that gets a W-2, your employer withholds and pays taxes for you from your paycheck. Some helpful information from the IRS on starting a business. The other Julie gave you some good information on what types of business entities there are. I've always been a sole proprietor and file a Schedule C as part of my 1040 tax return. You can use your social security number, but I also agree that you should get an EIN (FTIN). More info here on how to apply, etc. HTH a bit,

That link was exactly what I was looking for. Great info, esp. since it's from the IRS directly. Thanks!

Carmen - If you have read all this great advice and decide that you still want to start out small and work your way into a bigger business entity, you can still apply for a business name that is just your name or something simple, like Carmen's Admin Services. You definitely should get an EIN, regardless, for the reasons listed above (don't give out your SSN.)

However, there is nothing that says you have to USE your business name. It doesn't have to be on your business cards or your web site. You don't have to answer your phone with your business name. There are some things that may not be as easy - like setting up a Facebook Page, but you can make it work, as long as you have clients and you make your name well-known.

My dad has run a very successful business for years this way. Everyone knows his name, but no one knows his business name. The bottom line is, do what works for you. If it isn't working, then change.

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Jennifer Simons - Girl Monday
www.girlmondaysf.com

I have not had any income yet from my business; but I have done some work with a client as an employee. When I "created" my business I applied for the EIN but have since then changed the name of my business. My question is do I use that number when the need arises or do I get a new one? That article is great information and it will certainly be a helpful guide.

diana

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Diana Buchanan
When You Don't Have the Time

First I want to say - isn't it great that a thread that was started almost 2 years ago is still helping people today? Shows that good information is timeless.

Diana - You do not need to get a new EIN#. If you want to keep things tidy, for bank accounts, your licensing, etc. all you need to do is change the name that is associated with that EIN and that can be done by simply filing a form with the IRS asking for the change. I don't recall what form # it is, but you can call them and ask.

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Pam Blackman - The Process Coach
Get more done in less time by streamlining!