Author Topic: Registering as Self Employed  (Read 1055 times)

Offline SamPerkins

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Registering as Self Employed
« on: January 31, 2012, 09:46:44 AM »
When does one register as self-employed? I called the tax office, and was asked if I advertise as 'self-employed'. I said I have business cards, so perhaps yes. But I have no earnings yet.

So when do I do it?

Offline ma100

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Re: Registering as Self Employed
« Reply #1 on: January 31, 2012, 10:05:22 AM »
Are you English or American mate, I can only give advice on English.

Offline wanderer

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Re: Registering as Self Employed
« Reply #2 on: January 31, 2012, 10:56:08 AM »
Basically you are "self employed" if you are making money from your own employment. Laws change from state to state, but in general register a DBA (doing business as), file for state income tax permit, then check your local place for city/town/local sales tax collection and any permits/fees.

If you are not making any money, then I wouldn't worry about it except it is nice to have all the registration, because you can deduct business expenses from your income tax next year. Plus you can buy supplies tax free.
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Offline SamPerkins

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Re: Registering as Self Employed
« Reply #3 on: January 31, 2012, 11:02:35 AM »
Are you English or American mate, I can only give advice on English.

I live in England.

Offline SamPerkins

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Re: Registering as Self Employed
« Reply #4 on: January 31, 2012, 11:03:17 AM »
Basically you are "self employed" if you are making money from your own employment. Laws change from state to state, but in general register a DBA (doing business as), file for state income tax permit, then check your local place for city/town/local sales tax collection and any permits/fees.

If you are not making any money, then I wouldn't worry about it except it is nice to have all the registration, because you can deduct business expenses from your income tax next year. Plus you can buy supplies tax free.

It is the deduction of expenses that made me wonder if it would be worth me registering before an income. I don't know. It is scary!

Offline wanderer

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Re: Registering as Self Employed
« Reply #5 on: January 31, 2012, 11:14:13 AM »
The problem is to deduct taxes for this years filing (2011), you would have registered last year. However if you register this year, then you can deduct throught the year for next year (this year) taxes.

Generally the IRS wants to see a profit in a few years out of 5....although writers, actors, etc. are treated a little different because of the nature of their work. You can check online.

So you can take all deductions this year and next, but then should show some income and profit in the third year. I'm not sure which state you are in, but usually there is a small business office in most cities that will get you all the forms and help you. Check the yellow pages or ask your bank.

It isn't difficult, but you will be at the mercy of the government (federal, state, local) and it can be a pain working with them. The upside is you will appreciate what businesses have to go through  ;) ;)
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Offline ma100

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Re: Registering as Self Employed
« Reply #6 on: January 31, 2012, 11:16:56 AM »
Nothing to be scared of mate, unless you are earning from self employment, it's not necessary to inform the tax office until you have been self employed a full year. (This means earning money from it.) Though, keep all expenses that you need to start up, eg the cost of your business cards, computer etc. Your tax libaility for that year is the basiss of the next two years tax assessment so most new businesses if they aren't doing exceptionally well try to bring in expenditure to bring them below the income tax bracket.

If you are working along side your self employment remember you only get a certain amount of free pay so the income needs to be added together. However, I don't think you have anything to worry about unless you have a large income from self employment and I gather that isn't the case yet. If your earnings don't exceed your tax code allowance, you have nothing to worry about at all.  ;)


Offline wanderer

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Re: Registering as Self Employed
« Reply #7 on: January 31, 2012, 11:29:01 AM »
Quote
Your tax libaility for that year is the basiss of the next two years tax assessment so most new businesses if they aren't doing exceptionally well try to bring in expenditure to bring them below the income tax bracket.

If I understand what you said (maybe didn't), that isn't the way it is done in the US ? However, I was assuming the OP was in the US ?
LAter, Bill
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Offline 510bhan

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Re: Registering as Self Employed
« Reply #8 on: January 31, 2012, 11:35:39 AM »
HM Revenue & Customs: First steps to register as self-employed
www.hmrc.gov.uk/selfemployed/register-selfemp.htm

HM Revenue & Customs: Self Employed
www.hmrc.gov.uk/selfemployed/

[PDF]
SE1 Thinking of working for yourself?
www.hmrc.gov.uk/leaflets/se1.pdf

HM Revenue & Customs: Registering for Self Assessment
www.hmrc.gov.uk Self Assessment Your tax return: the basics
Block all www.hmrc.gov.uk results

Work out if you're employed or self-employed : Directgov - Money ...
www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/.../DG_401597...

Registering as self-employed: the basics :: Freelance UK
www.freelanceuk.com/news/3270.shtml

How to register as self employed
www.bytestart.co.uk/content/19/19_1/self-employed-register.shtml
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