I learned yesterday that, if my game hobby nets more than 2/3 of an average income (I’m guessing average for my region), then I will need to get a business license.
Minimum wage is $8.25, and a lot of people around here make less than that because they live on tips. But let’s use it for “low average.” That means I need to net less than about $11,000 to avoid filing for a business license (which is $200/year).
That’s net, not gross. I suppose if I do really well in my Kickstarter, I’ll just have to offset the profits by paying my contributors more.
Oh, darn.
This post brought to you by: I am not going to turn my hobby into a business (again).
Serious comment- you need a license for a business? (As opposed to tracking business income and expensive for the tax people)
Yes. Almost everywhere I’ve lived, I’ve needed a business license.
Ok. I don’t think that’s the same for the UK, although I have no direct knowledge either way. I have friends who are freelance artists and its never been mentioned as a requirement to me. Paying your taxes on time- that’s a different matter…
If it’s just you, a DBA license is probably your best bet. It’s relatively cheap and easy. Also it lets you legally distinguish yourself from your company (eg – for the purposes of publishing/distribution contracts) while still lumping everything together for taxes.
(And then I realized you probably knew that because of the “again.”)
Andrew Jones It’s definitely different in the UK.
Here in Ontario, Canada, you just need a sales tax number, no business license (although you can certainly incorporate or the like).
Eric Simon That’s still a business, though, with a business license. Neither of which I really want to do. I’ve run several businesses in the past. It would be nice for once not to have a Schedule C in my taxes (not gonna happen this year, but it’d be nice.)
Oh, don’t even get me started on sales tax!
Here in Clark County, NV:
* Business license – just for doing business independently. $200
* Sales tax permit – $100 deposit, and the paperwork has to be filed quarterly.
* DBA filing if I want to operate as something other than Stephanie Bryant – $$ to advertise your DBA, plus a small filing fee (I think it’s about $50)
* Want a Corporation to protect you from liability? – $800-1200/year
And those are every year, except the sales tax. Yuck. No thanks.
Yeah, the sales tax issue is why I don’t sell anything directly.
That’s super interesting. I don’t think that’s true in my state, because I have made that much on a small business in a year and didn’t have to register (I did however pay a tax preparer to tell me how to be legal that year, because that was pain that I just couldn’t cope with).
Woah, here federally it’s a few hundred to start up a corporation, and a very small fee to maintain it. Even with lawyer fees it’s not going to get up to $1000.
Wow. And they (who?) make it appear as if the USA are more friendly to small companies.
By “small companies” they mean any company making under $1M.
Unless you have the money to make your company a corporation, it’s basically just additional personal income that will be taxed like whatever else you make. So, not particularly friendly, no.
Eva Schiffer​ well that’s the same here. As a publisher you need to take out a license and follow some regulations, but that’s less than EUR 100, non-renewing.
Stephanie Bryant​ so what, if anything, would convince you to make it a business? I’m genuinely curious, because I’m in the beginnings of setting up something myself.
I’ve owned businesses before. If writing and publishing games could pay close to what I make right now as a salaried writer, including decent health insurance, and with less stress, then I’d consider it. Since that is extremely unlikely, I have fortunately figured out how I want to focus my game-making enterprises.
Well you can’t avoid stress when you run a business, at best you can avoid self-made stress. It does get better over time, though.
So is it revenue or profit that worries you? If it’s revenue, what did you consider hardest in increasing it? If profit, what high cost items worried you the most?
I realise that you might not care to answer, that’s fine. I’m just asking, not demanding 😉