Plain-English guides to the paperwork side of starting a contracting business: licenses, business structure, an EIN, workers’ comp, your first employee, independent contractors, self-employment tax and insurance basics. Each one starts with the short answer, links to the official agency, labels state rules by state, and ends with an FAQ and a dated list of the sources we checked.
The paperwork steps to go out on your own as a contractor, in order: license check, business structure, registration, a free EIN, insurance and bonds, tax accounts, and what changes when you hire. Each step links the agency that decides it.
There is no national contractor license. How to find out whether your state, county or city licenses your trade, what boards usually ask for (experience, exams, bonds, insurance, fees), and examples from California, Florida and Texas.
Who needs a California contractor license, the experience and exams CSLB asks for, current fees, the $25,000 bond, the extra rules for LLCs, workers’ comp, and what happens after you pass. All from CSLB pages checked October 30, 2026.
How a sole proprietorship and an LLC differ for a contracting business: personal liability, how the IRS taxes each by default, state costs such as California’s $800 LLC tax, licensing-board rules for LLCs, and the questions to bring to a CPA or attorney.
What an EIN is, when a contracting business needs one, how to apply on IRS.gov in one sitting, the hours and daily limit, why you should form your LLC first, when you need a new EIN, and how to avoid paying a website for something the IRS gives free.
Workers’ compensation is run by each state, and the rules for construction are often stricter than for other businesses. How to find your state’s agency, what “one employee” can mean, how subcontractors fit in, and examples from California, Florida and Texas.
The steps a contractor takes before and after the first paycheck: EIN, Form I-9, Form W-4, new-hire reporting, state payroll registration, federal payroll taxes and deposits, Forms 941, 940 and W-2, posters and workers’ comp, with 2026 rates from IRS Publication 15.
How the IRS, the U.S. Department of Labor and states decide whether a worker is an employee or an independent contractor, where the federal labor rule stands as of October 30, 2026, California’s ABC test, and the paperwork for real subcontractors.
What self-employment tax is, the 15.3% rate and the 2026 Social Security limit, the $400 filing threshold, the deduction for the employer-equivalent portion, the additional 0.9% Medicare tax, and how estimated payments work for a contractor’s uneven income.
The common types of business insurance explained in plain English, which ones a state or licensing board may require, how bonds differ from insurance, and how to check that an agent or insurer is licensed. Education only, with no paid links.
Education only: general information, not tax, legal, insurance or other professional advice for your situation. Rules, fees and deadlines change and vary by state, county and city, so check the official agency we link or ask a licensed professional before you act. We may earn money from ads and, in the future, paid links; our advice isn’t for sale.
