People start new freelance businesses every day. If you have found a profitable niche and have the clients to start your own business, you first want to follow the proper legal procedures. Doing so ensures you don’t get hit with unexpected fines or taxes in the future.

Register Your Business Name

If you use any name other than your legal given name to conduct business, you need to register your business name with your local government. This typically requires you to apply for an EIN on a website such as IRS-EIN-Tax-ID. Registering your preferred business name also ensures that no other business within the state can operate under the same name.

Obtain Required Licenses and Permits

Every business requires some type of license or permit to operate. If you will be working out of your home, you probably need a general business license and home occupancy permit. If you won’t operate out of your home, the types of permits you need will depend on local legislation and the type of business you run. It is important to obtain your documents before you begin serving clients.

Complete a W-9 Form When Appropriate

Each time you start work with a new client, you will likely need to complete a W-9 form. This document acts as a formal certification that you provided your client with the proper tax ID. If you are a sole proprietor, this may be your social security number. However, many people choose to apply for a Federal tax ID for the additional benefits.

Pay Your Business Taxes

Many freelancers mistakenly believe they only need to file taxes on April 15, but the reality is that freelance businesses should pay estimated taxes every quarter. Each year, you may also receive 1099s from your clients if they paid you more than $600. Use it for reference when you report your annual income.

If you are ready to begin operation of your freelance business, you must first secure your EIN number in Colorado. To get started, contact IRS EIN Tax ID Filing Services for help.

Related Posts Plugin for WordPress, Blogger...