How are freelancing/commision based jobs online taxed?
I just applied and got accepted as a video word captioner, and it s mainly to make a little extra cash. However, I just thought about how I probably need to file my own taxes on that and as an 18 year old college student I m confused as to how that all works. Probably helps to mention that I ll be paid through PayPal.
- EvaLv 42 months ago
You report as any other self employed person would. Your income and expenses will be reported on Schedule C of Form 1040 and you'll pay self-employment and possibly income taxes on any profit.
- 2 months ago
They are taxed as normal income, and you pay the full share of SS/Medicare taxes, so 15% (as self employment tax) plus the income taxes.
- StephenWeinsteinLv 72 months ago
Freelance jobs are considered self-employment. You fill out Form 1040, Schedule SE, and either Schedule C or Schedule C-EZ, and you pay regular income tax plus a 15.3% self-employment tax.
- AmyLv 72 months ago
You'll probably be treated as self-employed, which means you are responsible for handling all the taxes yourself.
When you file your tax return you will include Schedule C. You might want to get a tax accountant to help you the first time; in subsequent years just copy what they did.
For just a few months of 2019, you probably won't earn enough to owe regular income tax. But you will owe self-employment tax (which is the Social Security and Medicare taxes that everyone pays regardless of income level).
You might also owe tax to your state, so look up the filing requirements there.
Tax payments are due in four installments per year, and you can pay online. For now, estimate that you'll owe about 15%. If you've never owed tax before, there won't be a penalty for not paying until you file.
Or if you have a regular job in addition to your freelance work, you can just increase your withholding there.
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- JudyLv 72 months ago
It's taxed as self employment. Keep very good records.
- G. WhilikersLv 72 months ago
Welcome to the world of the self-employed! The short version: you'll be taxed on the profit you make from your business. Track everything, keep receipts, and subtract the IRS-approved costs of doing business from your income. There's also a little extra bit of "self employment tax" that replaces some taxes normally covered by employers. You might (or must) pay taxes quarterly to make sure you're already paid up at the end of the year, preventing a rude surprise when you do your 1040 in January.
The IRS has extensive information regarding all that: