What are the key tax obligations for freelancers in 2024?.

Freelancers in 2024 face several key tax obligations that are crucial for compliance and financial planning:

Key Facts

• Freelancers must pay self-employment tax, which is approximately 15.3% of net earnings.
• Estimated tax payments are due quarterly, typically in April, June, September, and January.
• Deductions may include home office expenses, business supplies, and health insurance premiums.
• The IRS requires freelancers to file a Schedule C (Form 1040) to report income and expenses.
• Failing to pay estimated taxes can lead to penalties and interest charges.

Examples or Use Cases

• A graphic designer earning $50,000 a year would need to set aside roughly $7,650 for self-employment tax.
• A writer who works from home can deduct a portion of their rent if they have a designated office space.

Common Mistakes / FAQs

• Mistake: Not tracking business expenses. Tip: Use accounting software to keep precise records.
• FAQ: What if I don't earn enough to owe taxes? Answer: You may still need to file a return even if you owe no tax.