I always heard that when you make money as a freelancer that you dont get as much taxes deducted, and that it's usually a sweet deal. But recently, when I showed my W1090 to my accountant, he told me that I will have to pay $650 in taxes? How in God's name is a freelance check worth only $1200- end up in ME paying back the IRS $650 dollars? Has my accountant gone mad? Arent the tax rules extremely flex for freelance work?
HELP! Need expert tax advice please.
2007-02-02 00:36:04 · 2 answers · asked by Bellezza Caotica 2 in Business & Finance ➔ Taxes ➔ United States
Actually, that sounds about right. I don't know what tax bracket you're in, but assuming you're in the 28% tax bracket your federal tax would be around $336. Then you ALSO have self employment tax, which would be around $170, for a total hypothetical tax of around $506 on that $1200 check.
Not getting taxes deducted is never a good idea.
2007-02-02 01:50:01 · answer #1 · answered by figment_usa 5 · 0⤊ 0⤋
Freelance income should be reported as income just like pay from a regular job. Usually with freelance work you don't get taxes taken out up front, so you need to budget for it because you'll owe the tax man in April.
2007-02-02 00:43:42 · answer #2 · answered by IT Pro 6 · 0⤊ 0⤋