DMarkM1
Expert Alumni

Self employed

Your state/local laws will guide you on the need for a business license.  Generally, the answer will be "yes" as they will want to collect taxes from you.  It also sounds like two different businesses.  

 

As far as tax filing it depends on your business structure.  There are many nuances/options to consider (too many to list here) but generally you can operate as two sole proprietorships and file everything on your personal taxes using Schedule C's. You'll report and pay income taxes and self-employment taxes (employee and employer social security/medi-care taxes) on the net income. This also typically involves quarterly estimated tax payments.   Here is a link with more discussion on self-employment taxes.  

 

You could also establish your businesses as S-Corporations.  Under this construct you would pay yourself a reasonable salary and be responsible for reporting and submitting the payroll taxes (social security/medi-care) on that.  The other net income would be passed through on a Schedule K-1 to you and then you would generate a schedule E on your personal return to report.  You would not pay self-employment taxes on that schedule E income.

 

Again this is not all inclusive but items to think about and explore.   

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