What are the tax obligations for freelancers in 2024?.

Freelancers in 2024 face specific tax obligations that vary by jurisdiction. They are generally required to report income, pay estimated taxes quarterly, and may need to file both federal and state tax returns. Additionally, self-employment taxes covering Social Security and Medicare are applicable.

Key Facts

• Estimated Tax Payments: Freelancers must make quarterly estimated tax payments to avoid penalties.
• Self-Employment Tax: Typically, 15.3% on net earnings from self-employment.
• Deductions: Common deductions include business expenses, home office deductions, and health insurance premiums.
• Record Keeping: Accurate record-keeping is essential for supporting deductions and reporting income.

Examples or Use Cases

Freelancers providing services like graphic design or consulting often deduct expenses for software, marketing, and equipment used in their business.

FAQs

• What qualifies as a business expense? Any necessary expense directly related to the business can qualify.
• How do I calculate my self-employment tax? Use IRS Form 1040 and Schedule SE for calculations.