Should a freelance graphic designer charge tax?

15 October, 2021 Gerald Mischke 6

Answers (6):

    18 October, 2021

    Depends. A freelancer should only charge tax if their service is covered by a tax category in the Taxability Guideline for Freelancers on Singaporean Ministry of Manpower's website, which includes these 3 categories: Professional Items, Non-Professional Items and Employment Services. If it falls under employment services, then no. If it falls under professional items or non-professional items (these are considered GST/VAT-able), then yes. Freelancers should be aware that they can charge GST provisionally without explicit approval from IRAS (i.e., self-assess) instead of charging Value Added Tax explicitly (in other words pay out this money to IRAS).

    18 October, 2021

    If you are in the United States, there is no legal obligation to charge tax. However, if you are not in the United States, it is your decision whether or not to charge tax for goods and/or services sold. The General Accounting Office defines an independent contractor as "a self-employed person who contracts with clients or customers that take complete control of his or her work." This means that when making decisions about running your business, only you have final say over how things should be done.

    18 October, 2021

    If you are indeed, a self-employed graphic designer, then yes. It is important to always charge taxes for your services since the government will exempt entities like clients with paying taxes. When doing freelance work like web design or graphic design, it is the responsibility of the person who is employed by an external client to collect your taxes and send them in accordingly. Failure to do this might result in penalties if it comes out that you were not properly reporting earnings and subjecting yourself to legal consequences.

    18 October, 2021

    No. Freelance designers do not have to charge tax. Freelancers are aligned with more of an "assignment" design work as opposed to a "job" design work, and as such the responsibility of collection falls on the client's side of the transaction. Rather than having a client paying a freelancer for goods or services provided under UBT(Unincorporated business tax), the agreement is instead composed of an assignment fee that is paid out at a set time interval by a person or company to another person or company for rights over their intellectual property, ownership interest in work created, contracted services etc). In this case, there is no need for royalty payments because UBT does not apply.

    18 October, 2021

    Yes. Freelance graphic designers and other freelancers need to charge tax for two reasons: the practice is rooted in law and it's good business practice. It's a legal requirement that all businesses charge taxes on their income, so freelancers should follow this example. There are some exceptions but they're not likely to apply to most freelance graphic designers - you'll want to speak with an accountant about your situation before you get serious about charging taxes.

    18 October, 2021

    Assuming you live in the US, keep reading. If you live elsewhere, there may be agreements on freelancers paying tax that are not enforced here. That said, this is an issue mostly related to filing 1099s correctly for services performed as a subcontractor or employee. Tax law states that if your company provides IT, janitorial or other outsourced services to companies then they often have to pay income taxes for those employees. This would qualify as provide tax advice if someone is stating how much freelance graphic designers should charge tax - even freelance writers who serve as ghostwriters for their clients might need to charge tax).