Let me preface this by saying that I did a precursory search of freelance in the archives, I did not look at every comment on every post. That being said, I have recently been taken on freelance and was recommended by the employers that I look into forming my own business and talking to an account regarding taxes so that I can get the most money I can. Does anyone have experience with something similar, any suggestions? If it matters, I am in NYC.
as a freelancer, i thought you were essentially your own business? are you licensed? why not sole proprietor? it sounds like you are going to be responsible for your SS, Unemploy, and reporting your taxes quarterly, although as a sole proprietor it may work differently.
Very, very generally, if you are incorporated you might be able to save some money on taxes. This will only matter once you start making more than $25K/year or so, at lower income levels the fees and paperwork associated with incorporation aren't really worth the trouble (IMO). If the firm is going to be paying you more than that, frankly, they should hire you as an employee.
If you don't incorporate, plan to set aside 1/3 of every check to pay taxes quarterly.
Talk to an accountant that is of the same mindset re: taxes and laws that you are.
I have done some freelance last year for a little less than $10k and end up paying almost 5k in taxes, from what I could find, they charge freelancers in NY double tax for no reason... Perhaps making yourself a company could save you some on taxes, but once you are a company I think you have to pay other government fees that freelances don't worry about...
well it boils down to how you get paid. if its under the table, u can report it or not report it.
i do not have a LLC or anything, but do freelance with a few firms and i report all the 1099 i get at the end of the year. With my own clients, small jobs, that pays under 10k in cash, I report them or at a reduced amount base on how much expenses I can write off.
is it completely legal? probably not, but its the american way.
all of the above comments are correct. even Niro (what the gov't doesn't know won't hurt you...most of the time).
I'm not sure if NYC is different, but in Georgia and Florida, where I've done my own work, you simply file a normal 1040 with Schedule C (get turbo tax) and claim whatever deductions you have as expenses. You can do business as a DBA (Doing Business As) and simply file your own tax return. This is similar to a sole proprietor and your taxes are based on your total income for the year. Filing quarterly taxes should not be necessary unless you are incorporated or an S. Corp.
Good luck. Freelance seems to be the way to go these days.
Freelance Question
Let me preface this by saying that I did a precursory search of freelance in the archives, I did not look at every comment on every post. That being said, I have recently been taken on freelance and was recommended by the employers that I look into forming my own business and talking to an account regarding taxes so that I can get the most money I can. Does anyone have experience with something similar, any suggestions? If it matters, I am in NYC.
as a freelancer, i thought you were essentially your own business? are you licensed? why not sole proprietor? it sounds like you are going to be responsible for your SS, Unemploy, and reporting your taxes quarterly, although as a sole proprietor it may work differently.
Very, very generally, if you are incorporated you might be able to save some money on taxes. This will only matter once you start making more than $25K/year or so, at lower income levels the fees and paperwork associated with incorporation aren't really worth the trouble (IMO). If the firm is going to be paying you more than that, frankly, they should hire you as an employee.
If you don't incorporate, plan to set aside 1/3 of every check to pay taxes quarterly.
Talk to an accountant that is of the same mindset re: taxes and laws that you are.
I have done some freelance last year for a little less than $10k and end up paying almost 5k in taxes, from what I could find, they charge freelancers in NY double tax for no reason... Perhaps making yourself a company could save you some on taxes, but once you are a company I think you have to pay other government fees that freelances don't worry about...
well it boils down to how you get paid. if its under the table, u can report it or not report it.
i do not have a LLC or anything, but do freelance with a few firms and i report all the 1099 i get at the end of the year. With my own clients, small jobs, that pays under 10k in cash, I report them or at a reduced amount base on how much expenses I can write off.
is it completely legal? probably not, but its the american way.
all of the above comments are correct. even Niro (what the gov't doesn't know won't hurt you...most of the time).
I'm not sure if NYC is different, but in Georgia and Florida, where I've done my own work, you simply file a normal 1040 with Schedule C (get turbo tax) and claim whatever deductions you have as expenses. You can do business as a DBA (Doing Business As) and simply file your own tax return. This is similar to a sole proprietor and your taxes are based on your total income for the year. Filing quarterly taxes should not be necessary unless you are incorporated or an S. Corp.
Good luck. Freelance seems to be the way to go these days.
very funny archiphreak
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