As for things you already own, it depends on the structure of your business. If you’ve started a corporation, you can sell your laptop, etc, to the corporation. If you’re just doing a Schedule C, I’d look into depreciation schedules and the like. I’d also take a percentage–depending on your business. In mine, the entertainment is part of the business (I sell to comics/games, etc, and must keep up). So figure how you’ll do all of that.

Btw, you don’t need to report gross income several times a year. You only need to report taxable income. So if you’re only going to break even as the IRS defines it, then don’t worry about it. Otherwise, find some small business books on taxes (there are a million of them), and start reading.

Good luck with everything. I’m glad the site is helping. I hope this opportunity turns into the best decision of your life. Best, Kris

Where I’m getting confused is that everything I’m using in my freelance business–namely my laptop, internet connection and cell phone–are things I already had anyway and I’m just using them to make money now. I would still have and use them if I wasn’t using them to run a business. So do I count them as overhead? I also use them for personal stuff and entertainment, so do I just count a percentage as overhead?

I run a virtual assistant business and I set out to run it with what I considered no overhead. Except for the three tools listed above, all of the software I use is either free and open source or was already installed before I started. My web site is free, and all of the marketing I’ve done (so far) has been free. So apart from taxes, I’m not really sure what I should be counting as overhead and business expenses. But I feel like I must be doing something wrong.

As for taxes, I haven’t read ahead to see if you’ve addressed them yet, but that’s where all of my biggest questions are right now. I know freelancers are supposed to report income several times a year, but I don’t even know where to get started with all of that.

Thanks again for this, Kris. I’m one of the “suddenly unemployed turned freelance as a matter of survival” people, and I’m not doing well enough to be able to donate anything yet, but I’m telling people about this site every chance I get.

http://quickbooks.intuit.com/

Just playing with something like this will give you some good practice with the concepts that Kris is teaching here.