Do I need to be worried about taxes/business license on my side projects?

Asked by Russter (242

) June 19th, 2012

So I have my regular job, so taxes for that are pretty straight forward—just once a year with my w-2 info, etc. But I also have a side job that I am actually earning quite a bit of money with, in fact, more than my regular job. There are no other employees in this side job, it’s just me (making mobile apps). So, my question is, now that I’m making a lot of money with this side job, do I need to register for a business license? Do I need to pay quarterly estimated taxes to IRS or anything like that?

Thanks.

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2 Answers

If you earn more than $600 from any one contract job, that company will be required by the IRS to issue you a 1099 and to report the income to the IRS.

You will owe taxes on it. You should consult with a tax advisor (like a CPA) on how much to set aside for taxes.

You will have to file a Schedule C. Since you are performing business, you need a business entity. the simplest is a sole proprietorship. ( But depending on your tax situation, your tax advisor may suggest another option such as an S corp.) You probably should have a local business license.

marinelife (62485

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