who pays taxes?
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- OSFA
let's say I quote a client for the work they need. Do I include taxes for them to pay or do I cover that? specially if project will be more than $10,000?
How does that work, and which one is easier for both parties? pleeeeez?
thanks!
- TheBlueOne0
I don't think you can charge tax on labor/service, and any tax you pay (income wise) should be built into your price.
You can charge tax on any material goods you purchase to complete the project.
Correct me if I am wrong on this..
- jpea0
you pay the taxes. have them give you a 1099 before tax time cause you're responsible for it. don't explicitly include it in the bid. it should be assumed that you take care of it and it's a built in cost.
- TheBlueOne0
Thanks for the clarification jpea
- OSFA0
yeah, I was under the impression that I have to pay them, but wanted to make sure. Should I raise the price of the quote to cover tax money?
what's the easiest way to come up with an amount that will cover any unplanned expenses like last minute imagery, etc. should I detail that on the quote? or just include it on the estimate?
thanks for the help...
- TheBlueOne0
what's the easiest way to come up with an amount that will cover any unplanned expenses like last minute imagery, etc. should I detail that on the quote? or just include it on the estimate?
thanks for the help...
OSFA
(Mar 6 07, 11:11)What I do is spell out quite clearly what is included in the contract price and in plain language detail the process for cost over-runs or extras. Usually a per hour charge, or a cost-plus basis for extra materials.
Put everythign in writing,
- horton0
we charge a services tax here in canada (GST), which is 7% added onto anything i invoice, but sounds like you're talking about covering your income tax, which is just an expense that comes with freelancing. save your receipts and reduce your taxable income come taxtime.
- tkmeister0
you get a 1099 form address to your tax ID. usually i estimate about 35% goes to taxes.
think like this. if you have a fulltime job and getting 100k, that means you are taking home around 65k after tax. would you nagotiate that and ask for 140k so you can take home 100k?
- OSFA0
well, client usually pays on a per page basis, (editorial) so I believe that's how they will want to negotiate. mag will be approx. 120+ pages. Have you ever worked on a per page project?
- k0na_an0k0
you pay the taxes. have them give you a 1099 before tax time cause you're responsible for it. don't explicitly include it in the bid. it should be assumed that you take care of it and it's a built in cost.
jpea
(Mar 6 07, 11:04)Yuppers.
- CALLES0
not westley snipes
- -sputnik-0
just amortize the 30+% into your rate, and if possible form an LLC. i was able to buy things i needed and deduct a crazy amount when i filed my taxes. i always paid thousands each year in taxes but this year i'll probably pay a few hundred even though i made more.
- OSFA0
so, the more materials I buy for projects under my llc, the better it is for tax purposes?
- -sputnik-0
yep...for example, i wanted to reduce the amount of income for last year so i purchased an eames chair, some software, new phones etc. i can deduct things like the expensive chair by depreciating it over the next 5 years.
you can invest w/the LLC and do all sorts of interesting things. it really works for people who don't necessarily need to get cash from it regularly, although you can give yourself a salary...but then you pay taxes on that.
i have a full time job so the money i make on the side is money i invest via the company, or i buy nice crap for my office that way i show as little profit as possible (therefore get taxed less).
- OSFA0
interesting.... thanks -sput
- Rand0
I don't understand this question. you decide how much you want to charge and then you pay taxes on it, like any other income
- e-pill0
OSFA-
as a freelancer you need to take out 40% of your earnings and keep that money in a savvings and dont touch it. the amount taken out is higher than it should but this percentage works great when you need to estimate you are actually over paying taxes [you get the money back] its better to over estimate your earnings than under which leads to being penalized.
TheBlueOne-
you can charge tax to the client by applying for a Tax ID Number.just as you pay tax on clothing you can charge tax on your work, though highly not reconmended to annoy the client with such issues as you can then lose the client. but i have seen some people that do charge tax for their work.
- madirish0
"just as you pay tax on clothing you can charge tax on your work, though highly not reconmended to annoy the client with such issues as you can then lose the client. but i have seen some people that do charge tax for their work.
e-pill
(Mar 6 07, 13:39)this is a bit more tricky than just adding it. it is also state-dependent and in some, illegal. it is also widely varrring if you are working across state lines and how, when this can be done.
generally though, i would agree w/ e-pill as it will annoy the shit out of clients to see this line item, or make them walk away. just roll it into your rate/price and do the math on the backside, everyone will be happier.
- tkmeister0
eddie, overpaying taxes is a bad idea. why pay more to the IRS while you can keep it to yourself and gain interest. overpaying is basically the same as loaning money to them for 0% interest.
i think you are required to pay the same amount as you've paid previously or the difference needs to be XX%. i forgot exactly how it works.
- Crouwel0
i don't pay taxes.
years ago i went to the taxes guy and said:
"yo, i don't feel like paying taxes man.."and he said:
"aight.."