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Specs-

  1. Its gonna be a one man show.
  2. The person running the business already has a dayjob elsewhere. I guess he's a waiter and I am not sure if he has an EIN.
  3. He would like to avoid registrations until the break even.
  4. Its in Florida.

Nature of business - Online consultancy, content writing and web designing services. No other employees. All he wants is to avoid the hassle with IRS and to show the profits in his annual returns and pay taxes accordingly.

Is this possible to continue with this thing without the registration as a sole proprietorship? Its very much like working as a freelancer but under an unregistered brand name.

Thanks for your help.

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2 Answers

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for small operation and beginning stage you can accept payment on your personal social security ID. The question, is the company or person hiring you willing to deal at a personal level. The company will then just send you a 1099 at the end of the year (usually above $600)

Yes, you can start without registration but think about registration asap.

All your income will be reported on your personal tax. So yes you can do that.

For e.g Lot of bloggers who use adsense receive payments on their personal social security. Google then sends a 1099 at the end of the year and the blogger files the income under personal. Lot of people on freelancers do this on various freelancing sites.

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Thanks Nilesh Ji. It was very helpful. :) – Prateek Mishra Feb 3 '11 at 13:00
You are welcome Prateek – Nilesh Feb 3 '11 at 15:20
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AH - I am sure you also ahve to register a sole propietorship. Any business activity needs a license. You dont need to incorporate, but a business activity needs to be registered.

Its very much like working as a freelancer but under an unregistered brand name.

No, as freelancers actually ARE BUSINESSES AND ARE REGISTERED. Things like tax (sales tax) requires you to actually get tax numbers. THings like opening a business acount. All that requires you to register.

Whether you break even is irrelevant. The point is whether you have a regular business activity targeting to generate revenue, not just an odd once per year small side assignment.

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