BritishGuy36

Being highly knowledgeable in networking/systems administration, I've been approached by individuals that I know (or by their friends/aquaintances, word of mouth etc) to perform work on their computers and/or networked systems (i.e. provide a service). I would be paid either cash or cheque in hand. Of course would declare such income on my taxes.

Question:

Do I need a business license before I conduct such activity?

ian-mstm

That usually depends on the county! In Boyd County I didn't need a business license to start a home-based computer repair business. I'm not sure if Lawrence County is the same, so you'll probably need to contact your county clerk for a good answer to that.

Ian

BritishGuy36

Interesting, thanks neighbour.

meauxna

Or even the city... here it's drilled down to that level (darn them).

BG, look for Bob's good thread from this year where we talked about how to prepare the tax return for pick up work like this.
Keep track of your auto mileage and receipts in case it works out that you want to expense some things.
Good luck!

BritishGuy36

Ok thanks. I must have missed that thread.

I was thinking of paying for an hour of a CPA's time to ask what I need to keep records of for expenses/tax purposes.

meauxna

That may still be your conclusion, but that was a good thread, lots of the self employed pitched in. In fact, Rene has been doing her husband's books & had some great tips in there too.

Save *everything*. You'd be amazed at what you can write off (remember there are consequenses to that too, you won't show a very large income. Bad if you want a loan etc. Good if you want low-income deals!)

A practice run on Turbo Tax teaches you a lot too.

mayhemuk

Something I would investigate before I conducted such an activity (ahead of a license) is insurance?
What happens if (even if it's not your fault) data gets wiped or an electrical fault occurs and the computer (or house) is fried?
People can be not so friendly when things turn to shit (Again even if it's not your fault)

You might want some for of protection so your own home is not swallowed up in a lawsuit.

Or at least have some signed waiver that they have performed backups etc prior to your intervention.

Sorry to be a party pooper. It is what is stopping me from doing side work at the moment to earn some extras.

Rete

But in New York and in Fairfax County, VA you would. Any business conducted from your home/apartment requires a business license. The fee is small and obtained from city hall.

Jerseygirl

Insurance is the first thing I thought of too.

ian-mstm

That's good to know. BG lives about 10 miles from me, so I answered his question specifically rather than generally.

Ian

Noorah101

Yep. Hubby is self-employed doing contract work like that (same idea, different field). Keep track of everything, as meauxna says...you can write off a lot of expenses.

Here in Mesa AZ no business license was necessary, but my husband registered his business name officially so that he could get a Tax ID Number (TIN). That helped his customers know he has an official business, too, he's not just some guy who walked in off the street. It also helped get separate business bank accounts/credit/loans.

As for insurance, fortunately my hubby has a workshop in a building whiere the existing insurance covers whatever is in his workshop. As far as not getting the work done correctly type of insurance, he has the type of job where he can undo what he did over and over until he gets it right (and he's had to do that, too. LOL)

He HAS done off-site jobs, though, in private residences....I never thought to ask how he's covered that way for insurance...maybe I don't want to know... thanks for giving me something else to worry about. LOL

Rene

Bob

http://britishexpats.com/forum/showt...ght=contractor

that's the thread

One thing to consider would be liability insurance, you fix someones puter and the hard drive is wiped, you'd want to be protected, that kind of thing.

BritishGuy36

Cheers bob.

Michael

When people are doing independent contract work for a long time they usually set up a LLC. This gives them a certain amount of protection from lawsuits.

http://www.rjmintz.com/appch6.html

A primary goal of the LLC legislation was to change this result by clearly stating that the members and managers of the LLC could not be named in a lawsuit against the company. The new law was drawn specifically to provide a vehicle which would protect the owners from liability associated with the business-what the corporation was intended for but no longer accomplished.

Bob

one thing to consider, and this might not apply in your state, there might be a tax on services provided, there isn't in my state, so something to check before work so you can figure that into the rate.