I do freelance graphic design jobs. Do I need a business license?

Question

I was told that I need a business license to work as a contracter.Is that true? I report all the 1099 incomes every year in my tax return as a sole proprietorship. Do I need to start a business (like limited partnership) in order to be legal? About 20 percent of my income comes from my freelance works.

Answer 1

You don't need to form a limited partnership to be legal; you are fine as a sole proprietor.  If you are working from your own studio, there may be a local ordinance requiring a permit to work from that studio.  This would not affect your tax status.  Check at your city hall.