Paying taxes can seem daunting, and although there is a great deal more work in freelance app development, many developers avoid quitting their day job because they are daunted by the prospect of registering their business and doing their own taxes.
This blog will provide a brief overview into setting up your own business as a freelance app developer.
Make sure to register your business
You can receive tax deductions as a freelancer, so registering your business has benefits in store for you. The process is quite easy: You only need to register your business name at your local authority, whether it's a city, state or county. You pay only a small fee for a business license that you can keep for your own records.
You may want to also reflect on the business structure you intend to use. You may want to register as a sole proprietor, since this is the simplest. However, if the business runs into debt, your personal assets can be vulnerable. For freelance app developers, this should be sufficient. However if you have ambitions to expand in the future, you may want to consider another option, which is to set up a Limited Liability Corporation (LLC).
Get an Employer Identification Number
An Employer Identification Number (EIN) means that you have registered at the federal level, and that you no longer have to hand out your Social Security number. This makes it safer for you as a business person because you no longer are vulnerable to fraud or theft of your Social Security number.
Source: Findlaw, "The Freelancer's Essential 12-Step Guide to Avoiding Tax Trouble," accessed Sep. 01, 2017