I'm planning to work as a freelancer in a variety of fields, basically whatever I can do to make money and make ends meet.
I know I need to report income to my 1040 and all that, but I'm confused about sales tax. Shall I charge my clients sales taxes and remit them to my local government? Or is the money from clients considered wages? (We don't pay sales taxes on top of wages, do we?)
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The sales tax and the income tax are separate. The sales tax would apply to items covered by the sales tax and are usually added to the sales price then remitted to the state or local agency. As seller, you would be responsible for collecting and remitting the sales tax.
Thanks!
So if what I only provide services that are exempt from sales tax (for example graphics design) in my state and county? Would I still need to register "as a business" with my state?
Check with your state and local (city and county) authorities for requirements to be licensed to conduct business and to collect and pay over sales taxes, as these requirements can vary widely.
Please see this TurboTax tips article for more information relating to taxes for freelancers.
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