01-03-2014 02:13 PM
Early last year (2013) I started working as a freelance editing contractor through Elance.com. It is not my full-time job, just an occasional source of supplemental income, so I really did not earn that much from it. I assumed at the time that I could just file some sort of self-employment income form along with my regular income tax information to report the income and find out how much tax to pay on that income by April. However, I've been reading and seen a few things online about self-employed people possibly having to pay quarterly estimated tax on self-employment income. If I haven't been doing that, is there a way to file my self-employment income just once a year? What form do I need? Or should I have been paying quarterly all along?
01-03-2014 07:53 PM
01-23-2014 05:36 PM
As a freelancer, you are going to have to estimate your income.
Keep in mind that you also want to track expenses. Your self-employment tax is based on your net profit.
Your net profit is the total money you earn, less expenses.
The basic SE tax is 15.3% for the 2013 tax year--that's in addition to the need to withhold income taxes.
So, you'll want to estimate your income and hold back 15.3% plus enough to cover the taxes in your tax bracket if you prefer to 'pay-as-you-go.'