Do Freelance Writers Need a Business License?

Business LicenseWhen many people start freelance writing they are all excited about the different opportunities.  Whether the goal is to just earn a little extra spending money, or to turn their passion for writing into a career, they often don’t think about things like taxes and licenses.  Once you start making money, however, you need to take a little bit of time to get that annoying side of freelance writing taken care of.

So, the question is, do freelancers need a business license?  Unfortunately, this can’t be answered with a simple yes or no.  There are many factors that go into this type of thing.  Disclaimer #1: To start with, let me say that I’m not a lawyer, and I don’t even play one on TV.  If you want to be 100% sure you’re doing everything properly, go see a local attorney in your area.  What I’ll do for you here, however, is provide some general information and guidance based on my own experience.

Disclaimer #2.  I don’t have a business license.  I’m actually writing this because I’m working through the process of getting one, and figured other people might be wondering the same things I was.  Enough with the disclaimers!  On to the real content!

From what I’ve found, freelance writers do not need a business license to operate their company in any of the 50 states, or in any countries that I read about (though that is limited).  You do, of course, have to pay taxes on your earnings though.  So, if it is not a requirement to get a business license, why is it something you might want to consider?

Reasons why you might WANT a Business License

The following are the reasons that I have for why I want to have a business license for my freelance writing.  Some are more important to me than others, but I’m listing them all since I’m sure everyone will have their own set of reasons:

  • Builds Confidence – When you can say I’m a professional freelance writer with my own business, it really strokes your ego a bit.  There is no denying that you’re doing something right if you have your own business and you’re successful at it.
  • Adds Legitimacy – I’ve been freelance writing for almost four years now, and made quite a bit of money doing it.  Even with that, however, when you tell friends, family or others about it, they almost always assume it is just a stupid hobby.  When you’ve got your own business, however, it adds a sense of legitimacy.
  • Comforts Customers – Many customers are worried about getting ripped off online (after all, everything on the internet is a scam, right?).  Having your business license can give many customers a sense of comfort that they are working with a pro.  They will properly assume that you’re not going to put your business at risk to rip them off for a $50 article (or even a $5000 series of articles).
  • Tax Benefits – I haven’t personally done this yet, but from everything I’ve read, it is a lot easier to get tax benefits from the business when you have a license.  For example, I do the vast majority of my work in my office at home.  If I have a business license, I can write off a percentage of the mortgage, electric, computer costs, office equipment and everything else in there as a business expense.  While technically you can without a business license too, I’ve heard is it more difficult and less likely to get approved.
  • Litigation Protection – This one isn’t too important for most freelance writers, but it is still something.  If your business gets sued, they can’t take your personal assets.  So, if you happen to get hired to write something that is considered defamation of character or something, I guess this could come in handy.
  • Better safe than Sorry – A business license for me is going to cost under $50.  Not too bad.  If you assume that you don’t need one, and you’re wrong, it can come with hundreds or even thousands of dollars in fines and penalties.  Yikes!
  • You can have a Sweet Title – Hey, you’re a legitimate business owner now!  Want to be CEO of your company?  DONE.  Want to be “President and Big Man in Charge,” hey..there’s nothing stopping you.  You can be as crazy or as traditional as you’d like, but don’t hold back!  You’re working hard, you deserve that title on your business card (oh, and you should get a business card even if it’s just for fun).

I’m sure there are other advantages to having a business license for your freelance company.  If you can think of any, please post them in the comments below.  Also, if you have a business license, let us know!  I’m interested in hearing other people’s experiences.

Thanks for reading this post, I hope you found it useful. I'd love to hear what you thought about it in the comments below. If you're interested in publishing this, or any of my content, on your site I'd love to hear from you. Just contact me using my syndication request form HERE.

Also, If you're interested in receiving an occasional email from me with great information on how to write for money online, submit your email below. You'll also get a copy of my free report, "A Step-by-Step Guide to Finding & Landing Private Clients." Thanks again!

Michael

Comments

  1. says

    I haven’t gotten a business license, mainly because my city doesn’t require one if I am doing business as my own name. If I was taking money under a name like “Hokeyy Pokey Writing” and not my own name then I have to get a business license.

    However, I think more along what might be more important is incorporating your business. A license doesn’t really protect your assets, but forming an LLC does. That’s what I formed with my first business, because it was very liability risky. Of course, with an LLC means more paper work to file at tax time because you have to file extra forms as a corporation with federal and state. It’s kind of a nightmare lol
    Misty Spears recently posted…Niche Site #2 Update: Niche Social Media ResourcesMy Profile

  2. says

    Hi Michael,

    Thanks for an informative post! I don’t have a business license and don’t plan on getting one. I’ve organized my business as an limited liability corporation with the state of Texas (All Media Freelance, LLC). I operate under the D.B.A. Rebel Spark and another D.B.A with my partner, RTL Digital Media. The D.B.A.s are covered by the same protections as our LLCs because they operate under the LLCs. I had never heard of a business license for agencies that provide digital services for clients. Interesting. Please update us with another post once you get your license and let us know what you think about it.

    Samantha
    Samantha Gluck recently posted…US Spends Tons of Green on St. Patrick’s DayMy Profile

  3. says

    Yes, I have a business license and will continue to renew it every 5 years. Our license only costs $10, so it makes sense to have one.

    Also, it’s important to tell people what KIND of business license they should get; for example, a sole proprietorship won’t help you in the case of a litigation – they can still attach your personal assets.

    Great article, Michael!
    Bonnie Gean recently posted…Video Blogging Challenge – Day #12My Profile

    • says

      Oh wow, only $10! That’s great. I believe we’re in the same state, so mine should be the same.

      You’re right about the different options for types. I’ll have to do more research into that before I make any final decisions.

      Thanks!

      Michael

  4. says

    I’ve never had a business license, but intend to get one when the time comes. I intend to hire an attorney and a CPA. With laws, it’s better to solicit the help of someone who firmly knows and understands them. Florida and I’m sure most other states have so many statutes, till it ain’t even funny.

    I feel with any legitimate business that you intend to have and grow for years to come should have a business license. To me, it makes it official!
    Cynthia Dixon recently posted…When using graphics less is moreMy Profile

    • says

      I agree! I’ve got a few attorneys that I know who I can ask general questions to, so that is nice. Good luck getting yours when you’re ready! don’t forget to come back and let me know how it goes.

      Michael

Speak Your Mind

CommentLuv badge