Being a freelancer in the US

[Stefany93]

Howdy colleagues,

 

I got married in the US, and obviously now I am living here. It is a very nice country

 

I am wondering, how do my fellow freelancers handle the IRS stuff? For example, say I have a client who wants a website and I quote 500$ for the website. I receive the 500$ and then what? Some people have told me that you just need to declare the money you receive as a freelancer four times per a year to the IRS and pay some % of taxes on them. Is this what you guys do?

 

Also, to be a freelancer from home, do I need a special permit or would my work permit would be enough?

 

Many Thanks for you help!

Edited January 20, 2016 by Stefany93

[requinix]

Consider hiring a lawyer/tax company for a bit to make sure you're doing things right.

 

Getting started, the rules are complicated because you may or may not need to start making payments in the middle of the year. It has to do with how much you expect to make during the year and how it compares to what you made in the previous year. Being January you probably do, but between moving to the US and getting married and such, I don't know. (Probably.)

 

In general, you make quarterly-ish payments according to how much money you expect to make during the year. They don't all have to be the same amount, so if you get a big job or have a dry spell then you can pay more or less for an individual payment. When tax season comes the next year you pay taxes like normal, with your quarterly payments counting as taxes paid during the year. You then get a refund (paid too much) or have to pay more (quarterly payments weren't enough) accordingly.

 

Your clients will need to provide you with a 1099-MISC form if they pay you more than $600. They could do that when the job is done or at the end of the year. That's the self-employed equivalent to a W-2. That is then part of the tax forms you submit. The client will also submit forms like that to the IRS.

 

If you plan to do this as a real job, like as a contractor and not mere freelancer, then you should look into forming a S-corporation because the rules are a little different and you can probably pay less taxes that way.

 

IIRC, the most relevant forms are the 1099-MISC (payments made to you), 1040 (main tax form), and Schedule C (specific form for self-employment). I think there's another big one I'm forgetting, and there are a handful of others you'll come across.