Sole Proprietor / Doing Business As (DBA)A Sole Proprietor is the legal term for any money making project that a person does on their own. You don't have to "do" anything to be a sole proprietor. If you make money cutting grass, making webpages, selling Avon or in any other way on your own, you are a sole proprietor. In essence all you do is file your normal taxes with an additional piece of paper - the Schedule C - to explain a few details about how you made that money.
In addition to being a Sole Proprietor, many home business people like to have a company name for what they are doing. Instead of just getting checks as Lisa Shea, they want to get checks made out to Shea Computer Services. If you'd like to do this, the very first step is to set up a DBA. A DBA is a "doing business as" statement from your town hall, that says that you can take checks and be known as that business name. It should be free, and it's simply a way for banks and other people to know who that business name belongs to. If you stop by your town hall, they can have you fill out the form and be properly registered.
Once you are a DBA, then your bank account should let you take in checks either in your name OR that DBA name, and put them into your checking and savings accounts. You can even set up a separate account for your business if you want. That is of course highly recommended, to keep your "business income" separate from your "personal income". Of course as your business starts to earn money, you will be transferring the extra money from your business account into your personal account, as your reward for doing the hard work. This won't be a "salary" by the way, to account for separately. All of the money is yours as far as the government is concerned. You are the sole proprietor of the business, you own it all. But by having the personal and business money separate, it helps you make deductions on all of your business expenses, in a legitimate manner.
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