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Subject:ifreelance, crowdspring, elance, etc, how do I do this legally?
Time:02:13 am
I want to try these types of websites out, where I register as a freelancer and bid on clients and etc. I only plan on doing few, therefore only making me a *theoretical* couple hundred $ per month (obviously it depends wildly on if I am successful or not).

I have no desire to expand a home business farther than that at this time. In fact I may not even do it that regularly. Just something if I have the urge to do it. I just want pocket money, I have a day job that I won't quit. However, I want to start getting to do this more and more often as time goes on and hopefully I will have enough practice that I can be a real freelance dude full time some day.

However, I am clueless as to the legal process for this. If I do actually end up making a serious amount of money doing this (let's pretend hypothetically I ended up making a few thousand next year, seems like a lot but it is just pretending)... am I supposed to register myself as a small business with someone? Is there some kind of process I'm supposed to go through to get started? Or can I just go ahead and get started doing projects and then pay taxes on the income I make? If there is a process, where do I go first and what should I know first, etc? In terms of what kind of forms and gov entities am i supposed to contact and all that.

I'm asking this because in the past few weeks I started dipping my feet into this kind of thing just for fun on some lesser known websites for this kind of thing and I ended up making $200 in just 2 weeks only doing a couple small jobs. That kinda made me think, uh oh, I can actually make more money than I thought and now I wonder about the legalities of what I'm doing.
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wintersweet
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Time:2009-02-15 07:47 am (UTC)
If you're in the US, Nolo's _Working for Yourself_ is what you want (I have to go to bed now, or else, but I Think that's the title).
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wintersweet
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Time:2009-02-15 05:48 pm (UTC)
OK, now that I'm awake...Yeah, if you make more than a certain (very small) amount, the IRS will require you to report that as income from being self-employed and you'll pay significant taxes on that. (This makes taking deductions really important, if there's any way in which you have expenses such as books, professional development classes, etc., because those can really add up. If the work you're doing is totally electronic, alas, you'll not be able to reduce those taxes much.) If you make more than a certain (larger) amount from a single employer, they'll be required to file a 1099 with the IRS, and the IRS will know how much you got, and you'll need to report the 1099 on your tax return. There's a point at which you're making enough that you're expected to pay quarterly taxes, but it confuses me and I advise reading the Nolo book--in my case my husband, since we file jointly, just increased the withholding on his salary, and that covers it (I checked with a tax specialist). You probably won't need to worry about that for no, but if you wind up earning a few thousand dollars, you will *need* to have money on hand to pay at tax time next year. (It's worth starting your taxes really early so you know.)

As for getting a license and whatnot, it depends on both state and county/city laws. Because I'm making a career of what I'm doing, I decided to do it, but to be totally honest, most people who are just doing it for extra money don't. In my case, I had to go to to the city and fill out some forms, get approval from my landlord to have a home office (which I was lucky to get), and pay $50. The good news is that now I have documentation for claiming the spare bedroom as a home office...The Nolo book also has advice on this.

And hurray on making money--and yes, I'm sure people here would love recommendations. ;)
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lockemaison
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Time:2009-02-16 06:43 pm (UTC)
this is a great help thank you

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wintersweet
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Time:2009-02-16 06:45 pm (UTC)
I should note that the above is all according to my understanding, and I'm not an accountant or a lawyer and I haven't been doing the self-employed thing very long. :)

Good luck!
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hominysnark
Link:(Link)
Time:2009-02-15 12:53 pm (UTC)
http://www.sbaonline.sba.gov/

You need to be aware of Virginia's laws and regulations regarding home-based businesses and/or independent contractors, but that site should tell you what you need to know as far as the Feds are concerned.

If you decide to file as an independent contractor, you'll need 1099 forms from all your clients at the end of the year, but it's really not that complicated.

Good luck to ya!
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pisceandreamer
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Time:2009-02-15 03:27 pm (UTC)
That kinda made me think, uh oh, I can actually make more money than I thought and now I wonder about the legalities of what I'm doing.

Not the worst problem to have. :) I agree w/getting Nolo's Working for Yourself.

If you don't mind my asking, which freelance sites have you had the most success with so far?
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lockemaison
Link:(Link)
Time:2009-02-16 06:48 pm (UTC)
Currently I've done stuff for coworkers so I'm networking that way, which accounts for some of it. And I'm doing volunteer work which is networking me out to people who are interested. There are a few spec work competition sites that I've been meaning to get in on just to see if i have the chops to compete. One of them is crowdspring, but I haven't messed with it yet. I have actually gotten a lot of money out of http://webmaster-talk.com/graphic-design-contests both in the normal area and the $20-under area.

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pisceandreamer
Link:(Link)
Time:2009-02-16 11:12 pm (UTC)
Thanks and best of luck!!! :)
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