4 Reasons for Getting a Business License

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I made the decision to launch my freelance career after visiting Gina Horkey’s website over the summer of 2015. 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. I really was positive I could make money by writing for other people and businesses.

Responding to an ad on ProBlogger’s job board, I landed my first gig the next day. Within a week, I earned enough money to take Gina’s course. (I highly recommend it, by the way! )

When I realized that I was actually making good 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.

It also gave me validity. I wasn’t just sitting on the computer punching some keys. I was running my business. There’s a huge mindset difference!

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.

It’s worked well for the past three years – none of my business expenses have been questioned as being from a hobby. While taxes still aren’t my favorite thing, I’m sure following all the legal requirements helps them to not be quite as much as a pain as they could be.

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.

You may think that no one will ever catch me. And it’s very possible that they might not. But, when they do, your fine will cost much, much more than the original fee to do it legally would have.

To Open 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. And I like having a genuine business.

Getting a business license absolutely wasn’t as challenging as I thought it might be. So, if you’re ready to have an “official” business, I’d definitely recommend looking into your state requirements and taking care of them.