Does Freelance Writing Income Have to be Reported?
When looking to make money online, people often think of potential jobs that involve too much work or marketing. However, when trying to make money with ease, it’s wise to consider work as a freelance writer. While true, one must think about taxes and take the time to report their income. Otherwise, if a writer foregoes this, he or she will struggle when it comes time to file taxes. With this in mind, income must be reported, and here are a few things to consider. Different work opportunities: In many ways, it’s different from the kind of jobs held by people working a typical 9-5 job. However, one significant similarity between them is that like people employed in typical settings, one does pay income tax, and while that may sound like a bummer to aspiring freelance writers, forking over some hard-earned money to Uncle Sam does have its benefits.
When a person writes for multiple sites, he or she must send a copy of their tax information and identification. For example, most places will ask for either a driver’s license or other government ID such as a passport. With this, the company can confirm that the contactor is a citizen of the United States.
Send in that W9
The Internet is full of scams, and it can be hard to find legitimate freelance writing work, or any legitimate freelance work on the Internet. When seeking work, it’s a good sign if the employer asks the contractor to sign a W9 form. In fact, this is a telltale sign that the company is legitimate and reports the income to the IRS. Without a doubt, one must send this in soon, as a legitimate company will not pay someone without getting this vital information. At the same time, one needs to fill out it correctly as a mistake can cause the process to slow.
If one’s total income from doing freelance work exceeds $400 for that year, then they must pay an income tax; doing taxes as a freelancer is also a bit different from conventional employment. For starters, if employed formally by a business, then a person’s federal income tax rate is set at 7.65%. This is because the employer typically covers half of it, so freelancers have to pay the full rate upfront, which is 15.3%.
Dont Feel Intmidated
The entire process may seem mind boggling at first. All taxes, as any citizen of the United States probably knows, are due to the IRS by April 15th. Since most people will make well over $400 in a given year from each employer, it’s not as intimidating as it may seem, as people need to go through the process every year.
Save Ahead of Time
When it comes time to send the IRS that cold cash that hardworking writer spent hours upon hours earning over a keyboard, some people like to take whatever it is they owe out of their checking accounts all at once and pay that way. While that is a bit more convenient, it’s also kind of disorganized and can lead to issues with unexpected expenses that life throws at the average independent contractor. Plenty of people opt to have their bank take out 16.25% of their weekly pay and transfer it to a separate account. When doing so, when income tax time rolls around, they won’t’ panic and think about all the money they spent in their day-to-day life.
When considering freelance work, one must remember that they will probably have to pay taxes. The only time a person won’t pay taxes is when they only make a minimal income. However, the process must not intimidate one, as it’s easy to file on time or ahead of schedule. Remember, while it is not easy at first, in due time, most independent writers have no trouble filing their taxes and getting everything turned in on time.
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