An average full-time job will have taxes taken out for each paycheck without a response from you. Taxes deduct from earnings for you, which you can partially get back in the upcoming tax season.
If you’re a freelancer, you pay taxes much differently than individuals that work a regular nine-to-five job. Continue reading to learn how you can pay your taxes as a freelancer.
How do freelancers pay federal taxes?
Freelancers can pay taxes through websites and agencies that allow tax payment processing to the federal government.
The Internal Revenue Service (IRS) list these websites where you can pay federal taxes online:
As a freelancer, you’ll have to pay 15.3 percent, which is the federal tax rate for self-employed individuals in the United States. Freelancers and contractors will pay toward the Form 1040-ES (1040ES).
It’s a form that calculates the estimated tax payments of wages you’ve earned for the year.
Regular full-time employees have 7.65 percent deducted from their paychecks.
When you have a full-time job, your employers pay the other half of 15.3 percent. Since you’re a freelancer, you’ll have to pay the full percentage because you’re the employee and the employer.
When should you pay for federal taxes?
Freelancers, contractors, etc. have to pay their federal taxes every quarter. Here are the quarterly dates for federal tax payments.
- April 15 – for January, February, and March.
- June 15 – for April and May.
- September 15 – for June, July, and August.
- January 15 of the following year – for September, October, November, and December.
Before I talk about a good strategy to pay federal taxes, watch this video on quarterly tax payments.
You can pay your federal taxes before the due date. A reliable tax strategy for freelancers is paying your federal taxes monthly. Instead of paying a lump sum every three months, pay 15.3 percent of the wages you earned for the month.
PayUSATax may prevent you from making multiple payments within a quarter. That’s okay. Try another tax payment processor.
How do you pay local and state tax?
State tax depends on where you live. Each state has a different tax percentage. The great thing about state taxes is you get most of the money back. State tax deductions usually return to you in the next tax season.
Paying your state tax is as simple as paying your federal taxes. You’ll have to find your state’s department of revenue website to make a payment. If you’re a freelancer or contractor, you’ll pay a state tax 1040ES. Business taxes are processed differently.
Like state taxes for individuals, business taxes vary by state.
You can pay local taxes through property taxes. If you own a vehicle, a home, or other property, the local government will send a yearly invoice. The bill is a tax notice, informing you that you owe taxes on your personal or commercial property.
During tax season, you may be able to use your local tax bills as a deduction.
When should you pay state and local taxes?
Treat state taxes like federal taxes and pay it every month. Don’t hold on to the money. Pay it the same day the deposit goes through.
Watch this video on how state and local taxes work during tax season.
For local taxes, pay them before the year is out. Untimely payments of local taxes come with steep fines.
How much should I save for taxes as a freelancer?
It depends. You can save hundreds of dollars if you make tax payments every month. Also, you can save money by doing your taxes yourself. It cost roughly $176 to prepare a regular 1040 and state form.
Automated services online, like TurboTax, has made it easier for freelancers, contractors, and others to do their taxes. If you feel more comfortable with a tax expert, find a tax preparer whose familiar with freelancers.
Freelancers Pay Taxes FAQs
Let’s go over a few frequently asked questions you’ve seen on search engines across the internet. If you have any tips and comments on how to pay your taxes a freelancer, leave them in the comment section below.
How do freelance artists do taxes?
As a self-employed individual, a freelancer artist can pay taxes like all other freelancers and contractors, the 15.3 percent self-employed tax.
Do authors have to pay taxes?
Yes. The authors may or may not be self-employed. If they are self-employed, they will be responsible for paying 15.3 percent of their earnings.
How do I pay my taxes?
You can pay your taxes by phone, online, or by mail to the IRS.
What is the freelance tax percentage?
The freelance tax percentage is under the self-employment tax, which is 15.3 percent.
Do I need to pay tax as a freelancer?
Yes. If you’re earning a wage, you will need to pay your taxes.
Do you charge tax on freelance work?
Some freelancers charge taxes to pay off their taxes for the month, quarter, or year.