Legal advice

ok then im 15 years old and ive started to do some web designing, im making anything up to $500 for every project i do, i pay a $5 commission on every project i do however im not sure if i have to pay tax on the money in which i earn. the site i supply through is GetaFreelancer and in their T&C it states

"You are responsible for paying any taxes, including any goods and services or value added taxes, which may be applicable depending on the jurisdiction of the services provided by GetAFreelancer.com. These taxes will be added to fees billed to you, if applicable."

however i am not sure if i need to pay tax or if webdesign and database creation is a taxeable service.... can anyone help me on this?

also i want to set up a web designing company under the name of "big JME Productions"

this is the name i put on all projects i create as my designer sign however im not sure if by law i am able to make the company and/or if it is needed to pay tax on all income as its only me who is employed in the company but i want to do all work under my own production name, any advice on (i) if i am able to set this up (ii) if it would be needed to pay tax on all income (iii) if i would have to register this company.

any advice or information that may be supplied about any of the above would be briliant

Regards,
big JME

You need to pay tax on all income. If you work for a company (even as a freelancer) and happen to make over $600 (last I knew it was $600 anyway) then that company is required by law to report what they paid you as 1099 income.




Basically you just need to file for a fictitious business name (FBN) which you can probably do at your nearby city hall. You'll need to make this publicly known too, which is as simple as placing an ad in a newspaper or something, you've probably seen them: Jane Doe 1234 Main Street is operating a business under the name Jane's Fantabulous Pet Grooming. It's pretty simple and won't cost you much money. You'd be a sole operator, and all the taxes would still fall under your SSN. You don't really need to do much more than the FBN, and you're too young and small (and poor I imagine) to be messing around with a trademark.

You are by USA law required to file for all income. Even if your neighbor pays you $5 a week to clip her cat's nails it's still taxable income in the eyes of the IRS.

I'm not an attorney or CPA so this is not professional legal advice. I also don't know how being a minor affects your ability to go about this as you'd like and some of that may be affected by local and state laws.

Just to add to what medialint said....

Even though you would be doing things under your SSN, if you open a bank account, they may require an EIN #. This can be filed through irs.gov.

Also, by reporting all income, you should also keep track of all expenses associated with the business. Web Hosting, Domain Name registration, eating out with a client, gas receipts if you need to drive to/from somewhere business related (or keep track of mileage), computer (or other items that make it so you can keep on designing, etc....

Filing a fictitious name may be available online as well, if your state has a website...

Also, if any of this advice you get here happens to be wrong, and you end up charged with tax fraud or operating an illegal business, I really doubt that legal advice obtained from a technical developer's forum would be any kind of defense for you in court

Tax laws vary from state to state, and what's taxable also varies from state to state. Income tax is not the same as sales tax. There are legal steps you must take if you wish to operate as a business, and different steps if you want to use a fictitious business name. There are various types of business organizations such as proprietorship, partnership, limited partnership, s-corporations, corporations, llc, non-profit, etc. There are steps you must take to create a legal business. You must have a EIN of some form to file taxes. You have other steps to take if you pay other people in any manner. If you collect sales tax you must register as a tax collector. You will be responsible for quarterly estimated federal and state tax payments.

And as a minor I don't think you can do any of the above legally, at least not here in California.

One more word of advice, if you want your future business ventures to be successful, don't limit your chances by using improper capitalization or grammar in your writing.

An SSN can work instead of an EIN if there are no payroll employees. You're simply operating as an individual under an FBN but you're right, I already said I'm not an attorney or CPA :-)

I wasn't making any comment about the quality of the advice given, just a general comment on the wisdom of asking specific business advice questions in a developer forum. To me it's kind of like asking your mechanic for recommendations on a good drought-resistant garden plant

IMHO the best professional help to line up with a new business is working with a good CPA. I've had the same accountant since I started my business over 25 years ago. During that time because of the nature of the services I do, I've never needed any other professional advice.

ok should have stated that im in the uk, all funds to through my paypal account, i have a paper round etc. and dont pay any tax on that, i have my national insurance number but the card isn't valid till my 16th birthday

therefore how would i register to pay tax and how would i set it all up to pay tax, i keep records and invoices on all income and all expences that come with the company, electric costs, pcs, software costs, licenses for updates on software, i keep track of everything and keep all invoices secure backuped up on servers so i am able to show all my income from when i first started so im ok to show and pay tax on everything, i just dont know the ages and so on in the UK as some of the advice so far was all american

i just found this on the net about the tax in which i'd have to pay

Taxable income
Income from self-employment - due in two equal payments on account, with a third balancing payment (or repayment) due when the tax liability has been assessed

Normal due date
1st payment: 31 January in the tax year
2nd payment: 31 July following the end of the tax year
Final payment: 31 January following the end of the tax year

but i still have no clue how i would pay my tax or if i must register for tax

Yeah that makes a difference please disregard everything said in this thread so far, except maybe the tip to get an accountant :-)

can't get an accountant im under 16, and ive looked and checked with my dad but he thinks tax does not apply as my national insurance whihc is used to charge tax in the uk doesn't apply until my 16th birthday so i just want this all cleared up just incase