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Freelance Taxes 5757 Responses

Last post: 9 months, 3 weeks ago | Thread started: Nov 25, 07, 4:11 p.m.

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  • cosmo

    How do you guys handle tax deal?
    How much do you take out of each check?
    How does one not get attached by the IRS?

    I am new to working on my own. :)
    Give me some information please.

    Nov 25, 07, 4:11 p.m. – Permalink
  • akoni

    write off everything!!... save some for later so you can pay back,... but writing off what you can helps, save reciepts!!

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    Dog-earNov 25, 07, 4:45 p.m. – Permalink
  • cosmo

    When you mean write off, what exactly are you writing off?

    • Books? Hardware? What exactly falls under write off?– cosmo
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    Dog-earNov 25, 07, 4:46 p.m. – Permalink
  • akoni

    i mean save receipts that have to do with business, like if you use your cell phone for business calls, save gas receipts if you use your car to go to meetings, any hardware, software, business lunches you buy, save those receipts so you can write some of it off again, so you won't have to pay back as much.

    • Nice, didn't know you could do that.– cosmo1/2
      I write off a number of our meals, dude... ;) ... why do you think I beg to pay sometimes? WRITE OFF Y OUR LIFEnAN!– PonyBoy2/2
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    Dog-earNov 25, 07, 4:48 p.m. – Permalink
  • akoni

    http://sbinformation.about.com/o…

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    Dog-earNov 25, 07, 4:49 p.m. – Permalink
  • MrOneHundred

    Whatever you do, make sure you pay your taxes. I have just been hit with a $20,000 bill for 18 months of freelance where I didn’t put anything aside for tax.

    • Ouch! Sorry bro.– cosmo1/3
      I think many freelancers have been hit by this. Remembering to pay the taxes kind of reminds me of backing up data.– Jaline2/3
      ...in the sense that it is SO worth it to do it upfront and right away rather than wait it out and get hit harder.– Jaline3/3
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    Dog-earNov 25, 07, 4:56 p.m. – Permalink
  • cosmo

    This is pretty cool. Thanks man.

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    Dog-earNov 25, 07, 4:57 p.m. – Permalink
  • cosmo

    How much is required to put away from each check? 30%?

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    Dog-earNov 25, 07, 4:58 p.m. – Permalink
  • PonyBoy

    do what I do... don't pay them and hope no one's lookin'.

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    Dog-earNov 25, 07, 5:27 p.m. – Permalink
  • minimalista

    30% is a very safe percentage to set aside. If you do that you'll probably get money back (because you'll be setting aside 30% of your gross income, which has not had your expenses deducted).

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    Dog-earNov 25, 07, 5:56 p.m. – Permalink
  • johndiggity

    http://www.irs.gov/pub/irs-pdf/f…

    fill this out and send the check every quarter. if you fail to do so and decide to just file annually, you will be hit with interest charges. also don't forget about state taxes as well. you can find the forms on your state gov't site.

    don't fuck with the irs. if you owe them money, they will find you.

    • What do you think about pony's LLC deal? Worth it? Paying every quarter sounds reasonable I have to read up on it.– cosmo
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    Dog-earNov 25, 07, 6:07 p.m. – Permalink
  • PonyBoy

    you can also depreciate your computers/peripherals etc... I'd advise hiding yourself under a LLC or S Corp... that way when you fuck up... they can't come and steal your $39 TV...

    • :D– PonyBoy1/3
      That tv is worth $29 now.– cosmo2/3
      that's depreciation for you!– PonyBoy3/3
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    Dog-earNov 25, 07, 6:09 p.m. – Permalink
  • mrbee2828

    Get an accountant. It will be worth the $200 or so it will cost. If you're serious, then you have enough to deal with the first year without fucking up with uncle sam. Using some round numbers... if you make $100k in a year you're in a 25% tax bracket. If you're freelancing full time then you are self employed which means you have to pay self employment tax (medicare etc) so you can tap on another 15%. 25% + 15% = 40%!!!!!! Get an accountant and save ever receipt for everything you buy... down to bubble gum.

    • geez...40% is a lot of money going to them.– cosmo1/2
      if you're paying 40% of your wages in taxes, you're doing something wrong.– Faction182/2
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    Dog-earNov 25, 07, 6:10 p.m. – Permalink
  • MrOneHundred

    The problem for me was that when times were really good, I put some aside. But times become not so good, and what I put away, I had to use for luxuries like rent, food, etc.

    But me and money have never had a good relationship...

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    Dog-earNov 25, 07, 6:27 p.m. – Permalink
  • MrOneHundred

    In the end, though, the best way to handle my freelance taxes was to become employed and let some other schlubb deal with it.

    • lolz... kinda right there with you. Same situations you described above - 'cept I had a...– PonyBoy1/5
      ... mooching relative tap me out.– PonyBoy2/5
      Yeah, me too – my wife
      (just kidding).      – MrOneHundred3/5
      hahahaahah!!!!– PonyBoy4/5
      hahahahahahaha!!!– cosmo5/5
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    Dog-earNov 25, 07, 6:29 p.m. – Permalink
  • Jaline

    My dad does my taxes for me.

    Someday I will have to fly out into the wild and be a normal person.

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    Dog-earNov 25, 07, 6:39 p.m. – Permalink
  • skelly_b

    Keeping your business account separate is a must. It makes accounting at the end of the year much easier. Don't be afraid to spend on business expenses. If you do you 're spending pre-tax dollars, whatever is left-over is what the Gov is going to rake. As MrBee points out we get to pay those extra taxes that employers normally pay. But having pre-tax dollars is a much bigger benefit, since the Gov gets at an employees money before anyone else.

    And yes, I also would consider an accountant a must. It makes thing much easier. You just have to worry about a little bookkeeping throughout the year. Money well spent... and it is write-off.

    • personal note to skelly_b: one week and I'll 'be home'. :)– PonyBoy1/2
      Nice! Drop me a line when you get in town. And bring a coat, getting chilly.– skelly_b2/2
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    Dog-earNov 25, 07, 7:13 p.m. – Permalink
  • mbr

    I'd recommend a business credit card too. I buy everything business related, from computers to lunch, on one card. Makes organizing things at year end as easy as printing pdf reports (and you have a clear and clean record of every purchase).

    • second the motion– akoni1/2
      plus then any interest you pay on your business credit card is a legit deductible expense :)– horton2/2
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    Dog-earNov 25, 07, 8:48 p.m. – Permalink
  • cosmo

    Anything else I would need to know?

    • drugs are bad– PonyBoy1/7
      always wear a condom– PonyBoy2/7
      listen to your Parents– PonyBoy3/7
      don't let your mom comb your hair when she is mad at your dad.– skelly_b4/7
      HAHAHAAH..."mom!!! your pulling my head off!!!"– PonyBoy5/7
      you are still here?– cosmo6/7
      Hahaha... so funny, skelly.– blaw7/7
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    Dog-earNov 26, 07, 10 a.m. – Permalink
  • skelly_b

    Be creative with how you spend your money. You want to take a trip somewhere, look for something biz related, so you can write-off the trip. The more you spend on your business the less you will have to pay the government. Also, have an accountant help you put whatevers leftover in retirement accounts and such.

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    Dog-earNov 26, 07, 10:08 a.m. – Permalink
  • flashbender

    I would strong recommend using a tax professional. Mine costs $250 and I view it as money well spent since his advice and knowledge have more than paid for that fee with additional write-offs and peace of mind.

    • couldn't agree more. My tax guy is awesome! I get money back every year.– Point5
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    Dog-earNov 26, 07, 10:22 a.m. – Permalink

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