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Web Design Buisiness

Not sure where to post this so I felt this was the best place.

I'm hoping to do a bit of freelance design this summer. I know all of the technical stuff, but I'm pretty clueless to the business part. I've read what I need to do to make a contract and I think I can handle that (my aunt is an attorney so she would be able to look it over). What I'm wondering, is what about taxes and licenses? Do I need to pay a bunch of fees just to do a couple of jobs? I will probably be working alone, although I might have someone helping with graphics. I feel that I shouldn't need to get a license for this, but I probably am supposed to pay taxes. Is this complicated? Or do I just report it on my taxes? Anyone have experience/advice? (and I know that it's not legal advice, but a starting point). By the way, I live in the U.S. (Michigan).

Basically I'm looking for people who have done this before to see what you have done.
How old are you, and what is your yearly income?
LukeakaDanish wrote:
How old are you, and what is your yearly income?

I'm 18 and I have a summer job and a research job at school so let's say $3000-5000
At least before the research job, I've been getting all of my taxes back (federal and state at least).
If your needs are simple, you might want to consider adding PayPal's free "Buy Now" and "Add To Cart" buttons to your website.

They have free shipping and tax calculator tools.

I'm just now starting to use these so I can't vouch for them. but you should take a look:
I'd like to do the same thing as you but for now I need to get some contracts.
Im not sure about the laws where you live , but here in california if we are a contractor... we have to fill out a 1099e form... which means that we charge a price for a sevice and then at the end of the year we have to allocate taxs for it.. What i have done in the past was use a CPA to work on all my 1099's. They have been able to save me alot of money by finding deductions...

I think this would be the best way to go if your just starting out....

Tax's can be painful if you dont know what you are doing.
I've done a few freelance jobs and basically I just put it on my taxes. If you made under 3000 or so, I think you don't need to do a separate business tax sheet where you have to pay social security etc in addition to income tax. Might want to talk to an accountant or maybe your aunt about that. Also, if you can, try to only do work for companies in your state. The reason for this is that otherwise, you will need to file state taxes with the state where the company you did work for is. For example, one year, I lived in Arizona, but did some work for a company in Iowa. I had to do both Iowa and Arizona state taxes. It will be much easier if you just look at Michigan.

Of course, I'm not a tax professional and you should talk to one to find out specifically what applies to your situation.
I'm 16, I freelance, and I just report my income as personal income on my taxes. Really simple service. You aren't going to have to pay sales tax to the state because you aren't selling a product, you are selling a service.

-Nick Smile Smile Smile
Thanks for the replies, I don't actually have the time I thought I would this summer (two jobs is enough) but I'll look into it more when I can. It sounds like I can just report it on my taxes because it will just be a small amount at first.
I hope taxes don't screw me, all i wanted to know was make money, and write stuff off and save money. well if people care to know in winnipeg you can make upto 10k without having to pay taxes, we.. too bad there's not people around who are willing to get work done.. maybe it's just me.
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