I made the decision to launch my freelance career after visiting Gina Horkey’s website over the summer. I don’t even know how I got to her page.
But I’m thankful I did!
She offers great free content, and after spending a couple of hours reading, I just KNEW this was what I wanted.
When I realized that I was actually making progress on my new career, I made the decision to legally start my business.
In my state, that meant getting a business license.
Here in Washington, it cost me $25 and about 30 minutes of my time. The process was entirely online, and very self-explanatory.
Do you HAVE to get a business license?
Well, I’m not sure. I don’t know where you live. Check the laws in your state.
Here are four reasons I WANTED a business license, even if I didn’t NEED one:
To Make it Official that I WAS Starting a Business
There’s something about receiving a business license in the mail that makes it official. Pulling my license out of the envelope, a great feeling of pride filled me. I had a business!
This also helped show my family that I was serious. That I wasn’t just going to talk about freelancing. I was going to actually do it.
I didn’t want the IRS to question the validity of my expenses
When I was mulling over the concept of a business license, I kept seeing freelancers referring to the IRS. Apparently, if the IRS believes your business is really a hobby, they will not allow your expenses to be written off.
It makes sense. Business expenses are one thing. Hobby expenses are something completely different.
I want to be seen as a business by everyone, including the IRS! Having a license will help establish the validity of my writing career.
To Avoid Fees and Fines for Not Getting a Business License
While researching, I discovered this post, also featuring a freelancer in Washington. She got hit with a large fine for not following state law.
Paying extra money to the government because I didn’t want to pay $25 and spend 30 minutes? No thanks. Her story was enough evidence I needed to obtain a license.
To Start a Business Banking Account
When a client asked to do direct deposit into my account, my red flag warning went off. I absolutely did NOT want to provide our family’s banking information to someone I had met online, and done one gig for.
While that client agreed to use PayPal, my husband and I decided I should go ahead and open a separate account.
To start a business bank account with my credit union of choice, I had to provide a Business ID Number.
To get that number, I needed to apply for a license.
So I did.
I’m thankful I have the license taken care of. For now, it was just a one-time fee. If I grow as much as I’d like to (in the future), I’ll need to change the type of license I have, and probably pay more money.
But I think it’s money well spent.
Lisa Tanner Writing is official.
What requirements for a business license do you have to abide by? Did you get your license right away?
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