Advice: How do you launch a professional career as a freelance artist?

[dshainn.livejournal.com]

Hey there, I'm going all over the place trying to gather info! I'll preface by saying I'm in the US.

I've officially made it to the point that I earn my living from commissioned work, primarily noncommercial (which makes a little nervous). I've been researching how to establish myself as a business, prepare to do taxes, and such, but the deeper I go the more terrifying things get—likely due to misinformation!

I could really use some guidance from people who already file taxes as a business! My question is super vague, but honestly.. I'm just at the fundamentals and totally overwhelmed by research.

Establishing a business name, and everything that comes with it seems freaking terrifying. For example, I read somewhere online that you need to "Complete a W-9 Form When You Get a New Client". Every time!? That seems realistic if you do large commercial projects, but what about these very small projects with tons of different clients? That's a lot of paperwork.

And, you need licenses/permit..? I've never even heard this for freelance artists.

It seems like there is an awful lot you'd have to do, and it's totally daunting. I feel like I may be getting the wrong info, too.

Can anyone set me straight on how I get started officially declaring myself as a freelance artist and the legal bits involved?

Comments

[cy mendoza (from livejournal.com)]

Hi! Here are some basic steps to get you started.

1. File for a FEIN. Because you'll likely be filling out w9's (like you mentioned) it's better to provide an FEIN than it is to provide a SSN, for security reasons. You can apply for that here: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online

2. File for sales tax licenses, especially if you are doing any work inside your home state, or you go to conventions and take work there. As a general rule, if you are taking the money physically in the state, you need to pay sales tax to the state. If you are taking the money via the internet and it's being shipped to the state you live in, then you have to pay sales tax to the state.

Google your state's name and 'sales tax license' and you'll find the form to file for a sales tax license. If you need any help, feel free to ask.

3. File for your DBA. This is the name you plan on using as your business if it's not your regular, legal name. For instance, if you call yourself 'Dshainn' or 'Dshainn's Art Commissions' and your real name isn't dshainn, then file for the DBA. To do this, search your COUNTY's name and 'assumed business name.'

If your name is, for instance, Daniel Shainn, and you are taking commissions as Daniel Shainn, then you don't need to file for a DBA.

4. Read all of this. https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center It will give you an overview of how to file federal taxes as a self-employed individual.

5. Keep record of all your business expenses. Cost of materials, cost of convention tickets where you solicit for work, cost of convention hotels where you solicit for work, cost of shipping, etc. These are deductible against your income.

6. In general, assume that you'll be paying about 30% of your after-expenses income. For instance, if you sold $10,000 in gross sales, and your expenses were $5,000, then that makes your profit $5,000. You can assume that you will be paying $1500 of that to taxes, to try to always save 30%.

7. At one point, you may be required to file for estimated taxes if your tax liability is more than $1000 a year. This means that you will have to pay your taxes for the year every quarter and sending them off to the government. Then, come the next year, you can review the year's financial information in total and determine your *final* tax amount, and file accordingly. If you overpaid your estimated taxes, then you will receive a refund. If you underpaid your estimated taxes, expect to pay a penalty along with your amount due.

Feel free to ask me individual questions and I'll help as best I can.

[adzuki.livejournal.com]

I had a question about the DBA. Does this only matter if what you have on your invoicing isn't the same as your name, or if the commissions are coming in from other sites?