For tradespeople going out on their own
Contractors Guidebook covers the paperwork side of going out on your own: licenses, business structure, an EIN, workers’ comp, insurance basics, your first hire and the taxes that come with it. Every step links to the official agency, state rules are labeled by state, and nothing here is tax, legal or insurance advice.
Start here
Most of the work happens before the first job: we break it into four parts.
Find out whether your state, county or city licenses your trade, what the exams and experience rules are, and which permits a job needs.
Pick a business structure, register it with your state, and get a free EIN straight from the IRS.
Workers’ comp rules, license bonds and the insurance contractors commonly carry, explained without a sales pitch.
Employee or independent contractor, your first payroll, and the self-employment tax you owe as the owner.
Each part links to guides that cite the IRS, the SBA, the U.S. Department of Labor and state licensing, labor and tax agencies, with the date we checked them.
State by state
Federal agencies handle your EIN, federal payroll taxes and the I-9. Licensing, business registration, workers’ comp and state payroll taxes are set by each state, and many cities and counties add their own business licenses and building permits. So we explain the federal steps once, show you where to find your state’s rules, and label every state-specific item with the state’s name.
California example: the Contractors State License Board says a license is needed for construction projects priced at $1,000 or more in labor and materials combined, and California employers must carry workers’ comp even with one employee.
From our sister sites: for websites, business email and field-service software, see True Trade Guide. For marketing and finding your first customers, see AI Talk for Biz. Both are made by the same team.
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.
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.
