I just started freelance design, and was wondering about taxes?

Question

so I technically haven't made that much...only about $500. so when tax time rolls around, do I claim this? keep quiet about it? what is the best way to go about this? any help of suggestions would be AWESOME!

thanks!

Answer 1

Actually, if your NET income exceeds $433, you'll have to pay self-employment taxes.  If your gross is $500, odds are that your net is less than that.

However, if you have ANY self-employment income, you must report it on Schedule C or Schedule C-EZ.

Keep your receipts.  Any expenses, including (probably, although the IRS may dispute it) travel from your base of operations to the customer's location at $0.485 to $0.585 per mile, are deductible.

(Please E-mail me to remind me to update this answer if you update your question again.)

Keep receipts, and record payments made to you in a logbook.  If you are able to deduct mileage, you'll need to keep a "contemporaneous" mileage log.

If you are an individual (i.e., not a corporation), and anyone pays you $600 or more, they're supposed to get your Social Security Number and report payments to the IRS on form 1099-MISC.  (Please note: If you are given a form W-9 to fill out, please fill it out and return it, or the payer is supposed to withhold 25% or more of the payment to send to the IRS.)

Answer 2

Yes, if your total for the year is over $400 you legally have to file and claim it.  Keep track of your income and any associated expenses.  You'll file a 1040, a schedule C or C-EZ, and a schedule SE