nyc freelance question
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- ldww
i am thinking about breaking off into freelance. i am wondering how much i should plan to set aside to pay my taxes, i live in nyc.
did you set up an llc to receive payments, or do companies pay you directly?
- woodyBatts0
I set aside at least 30% for taxes
Also be sure to save your money personally i feel 2 months is good, I have never been without work for 2 months but I have only once been paid on time, so the cushion helps when moving money too and fro
I have not set up an llc or inc, I have gotten the advice that when it is worth paying the money to set it up ( for taxes ), then do it.
As for payments, having a nice relationship with a lawyer is good. I have always been paid directly...I have had a lawyer contact a few clients who were grossly behind on payments, it tends to bring money in rather fast
- ldww0
Thanks for the input.
Would you say that you still pay out about 30% in taxes after tax write-offs or deductions are factored in?
- No, but you still ahve to factor in your taxes wil be 33%, there a re a lot of caps when you start writing things off.woodyBatts
- yaphi0
idww, are you going with a rep or anything? I've been flirting with this idea as well
- ldww0
i was approached by a company who would hire me but as a contractor. so not technically 100% freelance.
- e-pill0
33% for taxes if you receive under $120K
40% for taxes if you receive above $120Ksimple.
- ESPtype0
when I was working freelance I would allways set aside 1/3 or my paycheck.
- ldww0
33 or 40 including tax write offs?
- e-pill0
you want to take out 33 0r 40% out of every paycheck and pay that amount to the government. during april 15th is when you get an accountant to do all that write offs and stuff. you are allowed to write off half your rent and utilities. large donations to Goodwill is always good too.
for freelancing you need to keep all receipts for the last 7 years.
- tkmeister0
most of big agencies i worked for paid me in W2. so i had most of taxes taken out. and all the rest of income i got from 1099 was written off with expenses.
when i was getting mostly 1099, i did put aside about 30-40%. you'll get a lot of it back after write off. you still have to pay quarterly estimate tax though. so don't wait till April 15th and get hit with a penalty.
- era4O40
I'm not certain you'd be interested in this, as it's just you, but you can set-up a payroll system for your work when it gets more consistent, to auto-withdrawal from a company account and ACH into your own, with taxes taken out already. This can be accomplished using Paycycle, for a fairly inexpensive price and you don't have to worry much about the tax calculation.