Legal & Financial Protection for Letter Writing Business

Most letter writing side hustle guides ignore a critical step: protection for letter writing legally and financially. A single lawsuit or tax mistake can wipe out your earnings.

This guide covers:
✔ Business structures (LLC vs. sole proprietorship)
✔ Contracts every seller needs
✔ Tax deductions you’re missing
✔ Insurance for writers

All explained in simple, actionable steps—no lawyer required.

Part 1: Choosing the Right Business Structure

Option 1: Sole Proprietorship (Simplest)

Pros: No setup cost, easy taxes
Cons: You’re personally liable (risky at $10k+/year)
Best for: Beginners (<$5k/year)

Option 2: LLC (Recommended for Growth)

Pros: Asset protection, tax flexibility
Cons: $50−500 setup fee, annual filings
When to form:
- Making >$1,000/month
- Selling to businesses
- Using freelancers

Part 2: Must-Have Legal Documents

1. Client Contract (For Custom Orders)

What to Include:

Payment terms (50% upfront?)
Revision policy (2 free rounds)
Copyright ownership (you or client?)

2. Website Policies (If Selling Online)

Privacy Policy (Required by law)
Terms of Service (Limits liability)
Disclaimer (“Results may vary”)

3. Freelancer Agreement (If Outsourcing)

Confidentiality clause
Work-for-hire terms

Part 3: Smart Financial Practices

Tax Deductions You Can Claim

Expense	Savings Example
Home office	$1,500/year
Paper/ink	$300/year
Canva Pro	$155/year
Etsy fees	$600/year

Key: Track everything with QuickBooks Self-Employed

Separate Business Finances

Open a business bank account
Get a business credit card

Part 4: Insurance for Letter Writers

1. General Liability Insurance ($30/month)

Covers:

Client lawsuits (“Your letter ruined my marriage!”)
Shipping damage

2. Professional Liability ($25/month)