Going Legit

June --

I am a website owner and operator. I make money from ads.

I haven't really made that much in the past 5 years or so (or paid taxes) but this year, it has really taken off. I don't have a DBA or anything like that, but I really need to get everything legit. I can't even get a loan or a credit card because as far as everyone knows I haven't had a job for years. But I made about $10,000 last month alone. Reading various articles on your website has me a little scared to go to a local cpa. I'm not sure what I need to do.

Brian from Juliet, TN


Hello Brian,

Yours is not a unique situation.

For starters you do not need a DBA. For more info, read this DBA: Doing Business As -- It's just a name .

You may be able to get a "no income verification" loan. That means the bank doesn't look at what you earn but what you own.

Some credit card companies will give you a card with a very low credit line. After several months of proving yourself a good risk, upon request, they will increase the line of credit.

You do not need a CPA, you need a tax preparer with knowledge about taxes for the self-employed and experience working with indies. There are several posts here about picking a tax pro. Whether or not you get the right pro depends on on how you go about looking for one. As these posts point out, you need to ask the right questions when you interview him or her.

Keep in mind that as an indie you are responsible for your financial well-being. That means you need information about taxes and recordkeeping and a lot more. If you like what you read on my blog and website, I encourage you to buy a copy of my book, Self-employed Tax Solutions. The book answers many of the most common self-employed questions in the same easy-to-understand style you'll find in my columns.

Best of luck!
June

Multi-faceted Sole Proprietorship

Dear June,

Thanks for the great site! I am a teacher/tutor/editor/writer.

This year, I have taught part-time at a university and worked as a temp. I want to set up a tutoring business. I was advised that I could cluster all my writing-tutoring-etc. earnings together by starting a "sole proprietorship" in my own name. 1. Is this true? 2. If so, wouldn't it be better to register it officially? (one of your pages starts by saying you needn't, and then goes on to say there are many situations where you do).

I like the "one name" idea so I could put the income streams together, though I prefer a trade name for privacy reasons.

However, given my situation, what would you suggest is the best way to go forward.

Thanks for your help!
Anna from California


Hello Anna,

Glad you like my site. Thanks for letting me know.

Yes, all elements of your business are related and so you may be one sole proprietorship. [Of course, this does not include any income as an employee.]

I don't know what you mean "register officially." Other legal matters you must take care of depend on on local law and state sales tax. However, those requirements have no bearing on your being a sole proprietorship.

A trade name -- DBA, doing Business As -- does not mean that you cannot be a sole proprietorship. See the "business name" category on the left.

All indications are that sole proprietorship is all you need. If you haven't already, be sure to read , I am a Business on my website.

Do I need a business license?

June,

My position was eliminated from my company but I am approved to be an outside consultant (speaker). Should I get a business license or DBA? They will pay me via 1099. Right now I have 2 engagements lined up but hopefully there will be more in the future.

Thanks.
Kim


Hello Kim,

You do not need a DBA. Read DBA: Doing Business As -- It's just a name to understand what DBA means. Also, you need no license unless your profession requires it. Here's a column on my website you might want to check out I am a Business.

Wish you success!
June

DBA: Doing Business As -- It's Just A Name

Good afternoon, June,

Can a DBA have its own invoices, purchase orders and so on? Where can I find out about my responsibilities and my rights.

Thanks John from Forrest Cypress, TX


John,

DBA means Doing Business As and is just another way of saying that you John Jones are naming your business something other than your name. Perhaps you've named your business, "John's Business."

Take a look at this column DBA:Doing Business on my website.

DBA is not a business structure or business entity. You could be called John's Business were you a sole proprietor, corporation, partnership -- doesn't matter. There's more info on this at my blog post Which business entity is best?

Yes, you may write purchase orders using your business name. You need to check with your bank about depositing checks made out to your business if you don't have a business account.

John, I can tell from your question that you need a lot of basic information, too much for me to provide in one email. I recommend you start by reading a short column on my website, like: Is it a deductible business expense? and Estimated Taxes, a post on my blog.

If you like what you read there, I encourage you to buy a copy of my book, Self-employed Tax Solutions. The book answers many of the most common self-employed questions in the same easy-to-understand style you'll find in my columns.

Best regards,
June Walker

DBA:Doing Business As

June,

I have become self-employed and would like to know if I need to file a DBA. I began sub-contracting wireless engineering services for a major contracting firm as a 1099 employee. Any information would be helpful as I am quite new to this game.

Best regards,
Brian

Dear Brian,

Congratulations on your new solo venture!

By the way, to clarify a term, as a self-employed you may call yourself a freelancer, or an indie, or a sub-contractor, or a free agent, but you can no longer call yourself an “employee.”

“Doing Business As” shortened to DBA, is needed only if you use a name other than your own as the name of your business. In that case you would register your “trade name” with the county clerk. The purpose of registration is to make sure that no two people in the same county use the same business name.
You can find a lot more info on being self-employed at http://www.junewalkeronline.com/ .

And, as always, read the book that can simplify your tax and financial life, AND save you money!
SELF-EMPLOYED TAX SOLUTIONS .


Cheers,
June