There are many steps for starting a business. You definitely need to determine what type of business entity you are creating. Most small businesses start out as sole proprietors. (This is the same thing as an independent contractor). Sole proprietors include their business income on a Schedule C on their personal tax return. This eliminates having to file a business tax return and a personal tax return. For liability purposes, you may wish to create an LLC in your state. IRS does not recognize an LLC as a tax entity so if you are a single member LLC you will still file your tax return as if you are a sole proprietor. This link will allow you create the LLC in Texas and it also provides a wealth of information about starting any type of business entity in Texas.
Starting LLC in Texas
Generally, I suggest visiting your locality's Treasurer or Commissioner of Revenue to obtain a business license first. (If you are creating an LLC, you will need to create it before going to get the business license.) Your locality will be able to provide additional helpful information as well.
If you are really unsure of what to do, you may want to contact a QuickBooks ProAdvisor, Enrolled Agent, or CPA in your area.
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