Question:

Is freelance work taxable?

15 October, 2021 Matthew Culton 6

Answers (6):

  • AUTHOR: MARGARETE FLEISHMAN
    17 October, 2021

    Yes. One of the great advantages of self-employment is that you get to use a tax preparation program and fill out your own taxes, rather than relying on an accountant or other third party! Just like with any business, freelance work is taxable if you opt for more demand in the form of customers, clients etc. If there are no payments involved but people are still offering gigs without financial transactions happening then it isn't considered as salary - freelance work is nominally not subject to hourly rates because payment does not come in explicit intervals. When payments are given between two parties through price negotiation, contract agreements or otherwise, then yes this activity will be regarded as taxable income. Keep writing!

  • AUTHOR: REBECKA PARIS
    17 October, 2021

    It depends on where you live and what type of freelance work you do. First, freelance work is generally subject to taxation where the person doing the work lives--this is usually your home country or state. Therefore, if you live in Los Angeles and sign a contract with a company located in Boston to create graphics for advertising campaigns, Boston applies tax laws to your services. Second but very importantly, not every kind of freelance work counts as income that's taxable. Some forms of self-employment don't count as taxable income because they produce an exempt form or type of income; this includes investment earnings and some types of passive income (rental properties).

  • AUTHOR: FRANK LUPO
    17 October, 2021

    Is freelance work taxable? The answer largely depends on the type of freelancer and where they live in the world. For example, if you operate in the United States, then it's likely that your income is subject to taxes. However, if you're an English-speaking freelance writer who resides in a country like Canada, Japan or Sweden then it is not likely that your income would be subject to taxes. What constitutes as self-employment when it comes to taxation also affects what taxes apply. For instance, many people mistakenly consider themselves self employed when they are only doing occasional work on behalf of their own company for five hours per week - which can often lead them to pay too much tax!

  • AUTHOR: CLORA MICHAUD
    17 October, 2021

    Yes, in most cases it is. Freelance work includes a wide variety of income types and can be easily categorized into two types: "Personal Services" and "Income from Business." Personal Services income will likely include a W-2 from your freelance employer or an agency - which would mean you'll be paying significantly more for taxes. On the other hand, Income from Business would be taxable because you own it as a business entity - meaning even though freelancers don't have to pay corporate taxes they might pay self-employment tax (SEI). SEI varies depending on your earnings but for someone earning below $100k annually it ranges from 7% to 25%.

  • AUTHOR: LARISA BLOCK
    17 October, 2021

    Yes. Freelance work is taxable whether it's done online or off, and if you make enough to pay taxes, then it needs to be filed and paid accordingly. One of the most important things freelancers need to understand is that they're required to do the same filings as jobsite employees. This includes filling out jobsite paperwork (W-4s and W-9s), filing state and federal taxes, registering for unemployment insurance (where applicable), etc -- essentially anything that any employee would need to comply with on a regular basis. Below we'll break down exactly what this entails so you know what each of those pieces mean so there are no surprises on April 14th!

  • AUTHOR: JOSHUA NOREN
    17 October, 2021

    Yes, because freelance work falls under "self-employment" and not "employment" according to the IRS. This means that any income you earn from freelancing is taxable because it's not being taxed by your employer, meaning every dollar you earn from self-employed work must be taxed as income even though there are many deductions available. If you're a part of a studio or other business that pays for your contract work then it could be an employee/employer relationship and should fall into the W2 withholding tax category, however this should still be discussed with a lawyer. Furthermore, if a client has an employee who performs freelance services on behalf of their company then they could also be liable for those taxes as well.