Do you need to pay taxes when working freelance?
Answer:
You are required by law to file a tax return if you are self employed, no matter how much you earn. You must therefore contact your local HMRC office immediately to do so and they will send you a return to complete.
As to how much tax you have to pay, that depends. The HMRC will only tax you on your profit so ensure you declare all your expenses on your return.
The tax threshold for the current year (April 06-April 07) is £5,035 so if your profit for the year exceeds this amount you will start paying tax.
As someone else pointed out, you also have to register for National Insurance contributions. The type for self employed people is called class 2 and is a flat rate of just over £2 per week. You will therefore have to pay NI from the date you started trading. You will need a leaflet called a CWF1 for this purpose.
Yes you do. Unless you want to go to Jail (or get a tax bill)
You certainly do. All earnings are taxed in UK. The revenue will tell you whether you need to pay tax when you fill in your tax return. By law you must tell both National Insurance and Tax office that you are self employed. If you don't, you risk prison. look at ken dodd and lester piggott.
I'm not sure if you live in the UK.
I work in the Inland Revenue tax office for the Leicester & Northants area. I see many Tax Returns come in as Freelance Architects, Freelance Designer etc.
They are charged tax on what they earn.
It depends on when the period was when you earned the £5k. If it is from 06/05/06 this year and you earn a further £1k then yes, you will have to pay some tax as you are over the £5,035 threshold for earnings that are not taxed.
Yes, you definately do need to pay taxes. The people that pay you have to keep records as to whom they paid and in what amount. They report this on their tax returns. You will need to pay Federal Income taxes and also the Social Security and Medicare Taxes. I would go to a professional tax preparer. I suggest Jackson Hewitt as they offer a Gold Guarantee that is well worth the money.
People who don't pay taxes cheat themselves in the end. If you don't pay taxes and it comes time to recieve Social Security you will not be able to get it if you have not paid in to it.
Two things in life are certain, death and taxes.
UK
You will have an allowance of about £4800 per year, anything above that is taxable.
Remember that you can claim for travel costs and other expenses which will bring your bill down.
You need to file a tax return at the end of the year declaring your earnings - freelance and PAYE. The tax office will allocate your allowances against that and let you know what tax to pay (assuming you file before 31st Sept). Don't forget to offset your taxable expenses against that.
Yes, by now you should have registered to pay NI contributions. Its illigal to not do so within 3 months of earning money.
You are likely to be over the threshold to pay tax
As with the above you should inform the Revenue that you are self-employed but do check the threshold on paying tax - I think it is about 7000 Pounds per year - anything less is not taxed. I personally wouldn't bother as you say, it is a temporary situation.
Yes you'll have to pay taxes on all earnings above $600 in the US.
If you don't pay taxis your going to have to be very careful as your liable to get beaten up by some bloke whose been driving you about.
Best to pay, i think?
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