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I am not sure how I should be paying taxes for freelance/consulting work. With some of my clients I just signed a consulting agreement, and an NDA and then I invoice them. They pay me via credit card or check and I cash it directly into my bank account. How do I account for taxes in situations like this? |
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You'll normally need to file a schedule C with your taxes and declare all the income/expenses, and then this will be used to adjust your gross income from which you compute taxes. Depending on your corporate structure (if any) this could be more involved, overall you'll want to spend some time looking it up, or likely talking to an accountant. |
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If you haven't incorporated, then you're a sole proprietor. Centurion is right on the schedule C. But you also need to pay estimated taxes quarterly if you are above a threshold. Part of it depends on whether you are also paying taxes as an employee. You also need to register with your state and county and pay any local taxes they have. None of it is overly complicated after you do it the first time, but it can be confusing the first time, so if you're confused, go for the accountant. There can be fees and penalties for not filing or filing late, so don't ignore this or put it off until the end of the year. |
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It will depend on what country you are in. I would recommend speak to an accountant or at least visit your government tax website. |
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