Freelance work, sales tax and taxes?

Question

I've started doing a lot of freelance graphic art work. Mostly logo design. How much do I need to make in a year to start claiming it? Also, am I supposed to charge sales tax? I usually design their stuff and give it to them as a file and let them get it printed. So, it's seems to me that I'm offering them a service not a good? I'm in Ohio if that matters for sales tax.

Answer 1

Generally what you have described is a service on which there would not be sales tax. As for a tax return you would be required to file if you make $400 or more in taxable income. If you have other income that would require you to file a tax return you must report the first $1 earned from this activity. If any of the people that you do work for file 1099s, for the payments they make to you, those will be reported to the IRS with your Tax ID number.

Answer 2

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Answer 3

Sales tax laws differ state to state, so go online to yours. In Oklahoma, the tax commission has new business workshops that are 4 hours of explanations and questions all about this. SOME service business DO HAVE to charge sales tax, so be sure!!! If you make over 400 bucks Uncle Sam want's his share. Get a taxpayer ID # from IRS and register your bussiness with the secretary of state. You should know this...establishing your business as a "LLC" is the only smart way to go in a small service business like yours. Corporations pay tax twice, once as a business, then again when you pay yourself. LLC fees are under 100 dollars a year in OK, and you avoid double taxation. Call a CPA to help you set this up if you don't know how. Lawyers just call in CPA's to help, so you end up paying the cpa and the lawyer. OK's small buss. workshops guide you through this process step by step, an save you big $$$. Check your stae tax agency to see if they offer a program like this.

Answer 4

If you make $400 or more in a year from self-employment, you have to file a return and will owe self-employment tax (social security and medicare) whether or not you make enough to owe any income tax. If you are already filing a return for any reason, then you'd have to claim it from the first dollar.

You probably do have a sales tax issue. Contact the state department of taxation to get registered for it. Most states tax services as well as actual goods. The rules are set by state, so you'll have to check with them.

Answer 5

Check with your state, Board of Equalization or equivalent. Some states, you need to charge sales tax for goods and services and some states for goods only.