If you do register your service, you will need to declare your income from such activity to the taxing authorities. Depending on the governing tax laws, such may be considered as an advantage in that you may have the opportunity to use some of your current household expenses as business expenses which may be deductible from your taxable income. Your networth, in the eyes of financial institutions, may improve from the additional income that you get from the business. On the flip side, you do have to pay taxes on the income you make…. which may actually be a good thing. But most likely it will be a wash after the deductions are taken into consideration.

I would hold off until you have a good customer base and a regular income before turning your hobby into a business. Do the research in your area to find the ‘home business’ regulations so you can be ready to convert when you are ready.

I am an electrical engineering consultant in California and I had to learn about much the same stuff. At the beginning you don’t have to really do anything to be official. The category is called a Sole Proprietor. You will need to keep track of all your income and expense and fill it all out on the 1099 part of your taxes but there is no other paper work you need to fill out. You only really need to incorporate if you start to deal with insurance or hire people.

I had to go through all these sort of questions recently so if you have any others I would be happy to answer them

Good luck.

Long time, no see. Have you heard from BonusQuestion?

Do you have a teaching license? Your state may require it.

I would like to do tutoring when I retire from full time work. How did you go about getting students?

I’ve got a website, and they’ve been calling. Often more than I can handle (though I’m still writing my dissertation defense). I’ll start drumming up business in earnest later on, but so far it’s looking pretty good.