This may be a stupid question, but I'm young and not sure about this. When should I apply for a business license? Do I need one before I do restaurant work? I would think I certainly need one before I start doing paid birthday parties. I want to make sure I pay my taxes right. Is there any material any of you would suggest for keeping books and running an entertainment business?

You have to call your local city hall to find out. My locality doesn't require a business license, but some may. As far as keeping books, if you do not need a license, just keep folders for income and expenses. You can find mileage keepers at an office supply store. Basically, any money that goes into your bank account needs to be logged and reported to government entities (actually ALL of your income needs to be reported, but they only know about the money in your bank). At the end of the year take any W-2's and your folders to H&R blockhead (or similar)and have them sort it out.

Accounting services are not cheap, but contracting with a CPA to work with and help with questions is a plus. I'm incorporated, so every 3 months I send them my folders and they send me the necessary forms to sign and mail in.

For just starting out, keep it simple and add what you need when you need it. You can fly under the radar for a bit until you're sure you want to make this work as a business. Obtaining a credit card that you only use for business purposes is helpful. Research getting a liability policy (I like Ken Bomba of Bomba Insurance).

Some localities charge sales tax on services as well as products, so you may need a sales tax license which will need quarterly forms. If you are using a business name for clients to make checks to, you'll need a business account. Some banks have free business checking, some do not.

Wow, thank you so much. That's great information!

I have heard it go both ways where I live. When I started out I got myself a business license but back then I was 15 and they were free (something about my age). When it came time to renew I found out that technically what I was doing could be called private contracting and I would not need a license. This can be loosely considered as paying your retired neighbor to paint your house. He certainly does not need a license.

I think I have renewed once but I have been fine without one for a good while. I am a little foggy on the details but from what I know as long as you are not doing anything to really throw yourself out there no one will ask or bother. I am starting to expand and exploring greater advertising oppertunitys such as radio and print so I figure I will be picking a new license up.


Dylan

I have never had a business license in either Virginia or Texas. I'm not "incorporated"...I'm a sole proprietor, but that doesn't really mean a hill of beans to anyone. We do not have a "business account" as my magic and balloons is the sole source of our income...so our personal checking works just fine. I keep track of everything and at the end of the year, I use Turbo Tax to figure everything out. No muss, no fuss.

I'm not sure how it works in the USA but here in the UK if you are performing for the public, you need a public liability insurance to cover accidents and damage to your audience.
If you start charging for your balloon entertaining then it would be wise to look into this.

best wishes
Danny

Insurance and a Business License are two different things Danny...at least here in the states...

I sit corrected! Thanks Christopher.