Tax help

I am trying to do some freelance design work and after 3 months of searching, I finally found a publisher who wants me to help them design postcards for their books. Does anyone know if I need to get a business license to do freelance work and if I need to charge sales tax for the work?

PLEASE HELP me if you know the answers because I have been searching for answers all over the internet over the past 2 days and I cannot seem to find a website that really has them.

Help! Help! Help!

Depends where you are located. I can only answer for the UK.

In the UK you only charge sales tax (VAT) if your turnover goes over a set amount (currently around 55k I think). In the UK you don't need a business license as such, but you just declare the income on a form called Self Assesment.

You don't technically have to register as a business, but you do need to pay self-employment tax as a freelancer over a certain amount of money during the year. So you need to keep proper financial records.

As for sales tax, in the US that depends on your state. Each has its own rules, and you should check with your state's department of revenue. Some only tax certain kinds of products ("essentials"), but you need to find out what each considers taxable and non-taxable. You may very well need to obtain a sales tax license. If that's the case, you may have to register as a business after all, depending on your state's rules.

Jenn

Well, you can earn upto £5,000 in the UK before paying any tax

Where are you based? Also, try using more helpful thread titles in the future.

And your best notifying the Inland Revenue immediatly in change of your earnings because national insurance may come into effect when your in the UK (think if it averages @ £100 or a week you have to pay national insurance). Best advice i can give you talk to a solicitor about the rules and regulations surounding this. Might cost you abit for their time but its better than people coming back to you to pay up. Or alternatively you could take out the tax %age of out of the payment and put it into a bank or something that you won't touch and then if you have problems with the tax office playing up on how much tax you have to pay then at least it won't affect your income Thats what i do now and its quite nice after it starts building up over the year

Originally Posted by Robson Well, you can earn upto £5,000 in the UK before paying any tax Where are you based? Also, try using more helpful thread titles in the future.

Is it not 8,000?

Don't think so, i thought it was 5k as well.

Originally Posted by jhmattern You don't technically have to register as a business, but you do need to pay self-employment tax as a freelancer over a certain amount of money during the year. So you need to keep proper financial records. As for sales tax, in the US that depends on your state. Each has its own rules, and you should check with your state's department of revenue. Some only tax certain kinds of products ("essentials"), but you need to find out what each considers taxable and non-taxable. You may very well need to obtain a sales tax license. If that's the case, you may have to register as a business after all, depending on your state's rules. Jenn

Yes, like my states no tax on food