Are you thinking of becoming an independent contractor, but you’re not sure what to expect? Navigating the ins and outs of this path can be tricky. Here are tips from Nolo, an organization dedicated to disseminating legal information to consumers and small businesses.
- Choose a Name. It is a good idea to choose a name to use on marketing materials, etc. Unless you plan to use your full given name when doing business (Joe Smith Fitness Consulting, for example), the name you choose will be known as your fictitious business name.
- Register Your Name. If you choose a fictitious business name, you must register it with your local government. (If you use your full name in your business name, you won’t have to register it.) Check with your local county clerk for more information.
- Obtain a Business License. According to the Nolo website, “a business license is essentially a receipt for the tax you must pay to the city for the privilege of doing business in the city.” Contact your city clerk for information on policies and procedures.
- Pay Your Taxes. Those who make more than $400 per year must report this income to the IRS. Independent contractors are generally required to pay “estimated taxes” to the IRS four times during the year. Talk to your accountant for more information.
Note: This information is not intended to replace legal advice. Please consult your lawyer before making any business decisions.