Being 17 and a Sole Proprietor?

**Madman340** · 12:11 AM

I am starting up a web design venture and intend on doing so as a sole proprietor. Although I am only 17, and have just about no experience in taxes and really anything governmental, so... What kinds of things do I need, do I have to pay taxes even before I'm 18? Anything you can provide for me on this subject would be greatly appreciated.

Thanks.

Edit: I just read in a post on digitalpoint forums that if you are underage, you aren't allowed to enter a legally binding contract... Is this true? I have already put together a contract for my venture... Although I suppose since this is web design and deals mostly with the web, I could just stick it all into a Terms of Agreement checkbox...?

Oh, and I live in Florida, USA.

**theguru** · 05-17-2009, 03:08 AM

Yes, you aren't allowed to enter contracts until you are 18.

http://www.stateofflorida.com/Portal...t.aspx?tabid=8

All the Florida information is right there, Google is your friend

I'm 20 myself, it takes an extra 30 minutes a year for me to do my taxes as a result of my business. Just get a DBA and an EIN and it all works itself out pretty easily.

**willcode4beer** · 05-22-2009, 12:42 PM

Quote:

Originally Posted by theguru

Yes, you aren't allowed to enter contracts until you are 18.

http://www.stateofflorida.com/Portal...t.aspx?tabid=8

All the Florida information is right there, Google is your friend

I'm 20 myself, it takes an extra 30 minutes a year for me to do my taxes as a result of my business. Just get a DBA and an EIN and it all works itself out pretty easily.

But, for some reason you can get married if you're under 18

That's a legal contract that can affect your entire life.

**gistek** · 06-18-2009, 10:19 AM

Partner with someone over 18 for a few months. If it doesn't work out you can buy him (or her) out after you turn 18.

**Brian07002** · 06-18-2009, 06:12 PM

Or just do it...As NIKE did it...

Good Luck

**Destinyx3** · 06-18-2009, 08:50 PM

I am also 17 and a freelance web designer. I cannot technically make a contract and I don't have to file taxes.

Enjoy no taxes while you can.

**emofree** · 06-19-2009, 01:41 AM

well I guess you should wait for a year to turn into 18 study the whole concept on taxes and other laws abide in the contract first. And until you reach the age of 18 and your set to go.

**willcode4beer** · 06-22-2009, 01:39 PM

Quote:

Originally Posted by emofree

well I guess you should wait for a year to turn into 18 study the whole concept on taxes and other laws abide in the contract first. And until you reach the age of 18 and your set to go.

Heck no! Why wait? Just go for it, do your best and ignore all of the nay-sayers

**golden14** · 06-22-2009, 08:04 PM

Not just to you at 17! - But no taxes? To whoever replied to your post saying enjoy no taxes whilst you can, then do not kid yourself, if at 17 you come up with the idea for the next Google, ebay or Twitter, does anyone really think they can become a billionaire and pay no taxes just because they are 17?
It doesn't matter where you are in the world live, no matter what age you are you will beyond the individual tax free earnings in your country have to pay tax, end of story.

As an example in the UK the tax man can look back at your taxable earnings for 7 years - so if you earned $100k per annum from adsense from say 17 to 24, and then got caught out you would have a tax liability of $700k @ around 50% tax. So you think your liability is $350k if caught out - right? NO! in the UK they would not only hit you for back tax but they fine you (check this out!) 100% of the tax liability or around $700k.

So even if at say 17 years of age you earned $10k per annum from the net and didn't get hit by the taxman to say 21, you'd still be looking at tax on (40k + 40k fine) 80k of earnings. And I need not point out that in some countries you're not classed as an adult to 18-21 years of age - and in that case who do you think the taxman chases? yep! He simply takes Mom & Dad to court and forces them to pay your tax bill, after all they can simply sell their house,or you and them can go to jail (don't worry we will post you soap). But like the SOOOO knowledgeable gentleman says "under 17 enjoy paying no tax whilst you can - NOT!" - Bite the bullet, get an accountant, a Ltd company or INC company, or in the first instance contact your local business association, or pick the brains of a successful local businessman/woman, most of whom will be happy to mentor you for free if approached in the right way.
hope this helps - In the UK no-tax = jail (they don't care if you are 17 or less!, more so in the USA - fancy 3 days in San Quentin before they transfer you to a low risk jail....)
Hope this helps,
Cheers
Dickie Boy

**erikmanley79** · 04:40 PM

Hi MadMan,

Not sure how you new business venture has panned out but I say go for it and if you are concerned with taxes research how much sub-contractors have to take out of their earnings to pay year end income taxes and set that percentage aside just in case. As far as contracts go, I would set up a payment schedule with your clients and at each milestone in the project get your money before moving on. If they don't pay up, keep your deposit and the payments already made, deliver any work already paid for and part ways. Take care and good luck.

**Madman340** · 07-08-2009, 02:21 PM

I have made some progress since then:

I've finished my website and everything, and am about to turn it into an LLC.

Now then, if I approach these contracts as my company, can I be legally binded to them? My birthday is in December, so that isn't too far off at least.

**willcode4beer** · 07-09-2009, 05:56 PM

Though questionable, you probably would be bound to any legal contracts (if taken to court, it'll really depend on the judge). Anyway, you should want to be bound by them.

Since, your 18th is so close, I wouldn't worry about it

**legallink** · 08-11-2009, 05:06 PM

Hey guys,

Sorry I have been gone for a while...life got crazy, I got sick, and so I had to sleep!

Anyways, in relation to being 17 and a sole proprietor, there are a few things to look at.

1. you probably don't need a partner (depending on the state)
2. You are acting on behalf of your company, which means you will just need a letter indicating that you are the owner of the company and authorized to act on behalf of it.
3. The contracts you enter into will not be voidable on behalf of the company, as when acting on behalf of a company, the 17 rule will be looked at quite closely on the intent of the parties etc.
4. There will just be a few more hurdles to hop through when setting up, but you should be ok.