Ask HN: Do people get a business license for their evening projects in the US?

[Someone1234]

So back where I am from (not US) if your business has two or fewer employees and makes under a certain threshold then you don't need a business licence at all, and instead can just file any profit you make as "income." It does of course not grant you any legal immunity like a limited company would but it is a great way for a very small business to start out.

I was just reading the thread about people's side businesses that make sometimes a couple of hundred to several thousand dollars a year. And while I want to try a few ideas I have, after looking at the fees my state/city/etc charge it could easily cost several hundred all the way up to $500 just for me alone to legally make any kind of profit.

Plus the complexity of the entire process is extremely high. They're clearly using the same process if you're self-employed, a small business, or even a medium sized enterprise. It may take me weeks to get it all done (and still might make large mistakes).

So do people that make little apps that cost 99c or websites that just generate tens of dollars in ad revenue REALLY go through all of this? Seems like it will take ten years just to break even financially.

PS - Just to be clear, I absolutely would like to pay tax. I just want to pay tax as if it was my personal income, rather than file personal AND businesses taxes.

[tjr]

Sure, you can be a "sole proprietor", and just report your business income as personal income. I'm not aware of any limits on how much you can make and do this, though most people probably switch over to some sort of LLC or corporate structure if they're making more than a trivial amount of money.

[dangrossman]

Ask a local CPA. They'll know what's required where you live. My state doesn't require any kind of license or filing from sole proprietors, nor does the federal government. Income from the business is reported on your personal tax return. In other words, there's no startup cost in terms of money or paperwork here, or in many other places. Once I decided to form a separate business entity, an LLC, I had 3 pages to fill out and $150 in fees to pay: a 2-page certificate of organization with the state, and a 1-page business license application from the township. Each form took a couple minutes to fill out: all they asked was the business name, office address, and list of organizers/officers. I'm rather curious what city you're in that it would take weeks to organize a small business.

[chrisBob]

I did get a business license from my town, but mostly because I wanted a bank account with the company name on it, and this was the easiest way to get a business or DBA bank account.