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Self-Employment Tax
When someone who is
an employee receives a W2, income and social security taxes are automatically deducted from his or her paycheck and sent to
the IRS by the employer. This is not the case if you are self-employed. Freelancers are responsible for estimating and paying
their own federal income taxes (depending on location, state and city taxes could also apply).
Freelancers (aka
Independent Contractors) are individuals that complete work for companies or other individuals on a project basis. If
you receive over $600 in payments from any one company within the calendar year, that company is obligated to send you a form
1099. Freelancers must pay self-employment tax based on their annual earnings estimate, and should make quarterly estimated
tax payments to the IRS if they expect to owe at least $1000 in taxes.
Estimated Tax Payments
Freelancers should estimate their income for the year, and their quarterly tax payments, by completing tax form
1040-ES. Payments can be made to the IRS via credit card, automatic withdrawal, or check. The payment deadlines for estimated
self-employment taxes fall on April 15, June 15, September 15 and January 15. If you under- or over-estimate
your taxes, your end of year filing will be adjusted. Unpaid tax will be added, and overpayments will be refunded. Independent
contractors should keep excellent records to make the process of filing taxes easier. Receipts and invoices should be kept
for reference, but also stored up to seven years in case of a tax dispute. Freelancers should also track their projects
on a spreadsheet that makes easy work of organizing income, business expenses and estimating taxes.
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Need a Freelancer Spreadsheet?Track income, estimate taxes and organize your business expenses with ease. Buy and download a freelancer spreadsheet
in MS Excel format for just $7.27.
Sheet1, Estimated Taxes: Has columns for the invoice date and number, the clients name, the gross amount you were paid,
estimated taxes, and the net income.
Sheet2, Business Expenses: Has columns for business expenses, date of the receipt, the vendors name, and the amount
of the expense. (Note: Be sure to keep receipts for anything you intend to deduct.)
Totals are automatically calculated for you.
All fields are fully editable in Excel. A screenshot of Sheet 1 follows:
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Delivery: Immediate download following secure payment.
Payment: Visa, MasterCard, American Express, Discover & PayPal.
Format: You will need MSExcel '97 or higher installed on your computer to read this .xls file.
Return Policy: We offer the refund of any defective product within 60 days from the date of purchase.
Buy Now
$7.27
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