Freelance Estimator

[meech2019]

Hi there!

I'm a Georgia resident and have a full time job in Virginia, as well as 4 freelance contracts that I'll receive W-2s for in the 2021 calendar year in Georgia (1), Virginia (1), and North Carolina (2). Does Turbotax have any resources (formula, tool, spreadsheet) for estimating income tax for the self-employment side of my taxes? I've tried to use the formula on the IRS website and have ended up confused. 

Thanks so much!

[LJane29]

hi meech2019-

Can you clarify?  If you are receiving W2s for the work then you are not considered a "freelancer" - you are an employee.  If you are an employee then each business should be handling withholding if required.  Most companies will withhold based on where you are and not where the company is.

For example, I work for Intuit and I could live in Nevada and work from my home office.  Although Intuit is a California based company they would handle my state withhold based on my Nevada residency.

[meech2019]

Hi LJane29, 

I meant 1099s for the freelance work!! So sorry about that. 

[LJane29]

No worries!  It will actually still come down to where the work is preformed.  Each state has separate rules for how much income you receive and if you need to file.

So if you are traveling to the different states and performing the service you may be required to file "non-resident" returns.  This is a great article outlining that: https://ttlc.intuit.com/community/state-taxes/help/why-would-i-have-to-file-a-nonresident-state-retu...

But let's say your work is done at home then you only need to pay tax for the full amount earned (after deductions of course) to your state of residence.  The one thing to watch out for is SALES TAX - emphasis on purpose.  If your freelance work involves sales (like etsy) then you do need to charge sales tax based on the state/city/county you are shipping to and NOT your home state/city/county.

[meech2019]

This is very helpful. Thanks so much!